5 January 2001
Farms ‘deserve no special treatment’
By James Garner
FARMINGS contribution to Britains economy is so small that producers no longer warrant special government treatment, a leading economist has claimed.
Dennis Turner, head of business economics at HSBC bank, gave his thumbs-up to the way Chancellor Gordon Brown is managing the economy.
Farming contributes only 2% to GDP and therefore does not warrant special treatment from the Treasury, he told the Oxford Farming Conference.
Mr Brown had rightly concentrated on reducing inflation down, said Mr Turner. This had led to a stable economic environment, he told delegates.
Mr Turner said Mr Browns macro-economic policy had justifiably paid little attention to woes in agriculture, because of bigger goals.
Britain could now be proud of its economy – it was the most dynamic and robust in Europe, he added. Economists had sought such a goal for years.
“No-one can remember inflation being as low for as long; its the eighth year that inflation has been at 3% or below. It hasnt been like this for 50 years.”
The UK has controlled inflation using interest rates, he said, and a concurrent strong currency had hit the pockets of manufacturers and farmers.
Agricultures problems were less to do with the UK economy and more a result of a difficult global market and structural problems within the industry.
Looking ahead though, the economy may begin to offer farmers some hope, said Mr Turner, predicting a probable stronger performance from the Euro.
“Our view is that government has got inflation cracked and it will keep the headline rate within its 1.5-2.5% target,” he told delegates.
Interest rates should therefore fall to 5.5% by mid year.
And as long the Euro continues its recovery against the US Dollar, there could be a change in fortunes for exporters, and, by implication, agriculture, Mr Turner concluded.