NFU president Minette Batters wrote to the Chancellor Jeremy Hunt ahead of the Spring Budget on 15 March, urging the government to prioritise food production and warning the minister that farmers were facing a ‘cliff edge’.
However, the NFU president in a statement on the union’s website, said that the chancellor’s budget failed to address the needs of agricultural and horticultural businesses.
She said: “Ahead of the budget, the NFU was clear that greater support is needed for the thousands of farm businesses which are trying, but struggling, to keep our nation fed amidst soaring production costs. It’s therefore extremely frustrating that the Energy and Trade Intensive Industries scheme was not extended to include energy intensive sectors, such as horticulture and poultry.
“It begs the question – where does boosting Britain’s food security fit into the Treasury’s growth plans?”
Current support, under the EBRS (Energy Bill Relief Scheme) is due to expire at the end of March and will be replaced with the EBDS (Energy Bills Discount Scheme) which will run for 12 months.
The NFU believes that the scheme offers far less protection to businesses with the removal of the price cap, which will instead be replaced with a token discount. However, farm level sectors have been left out of this scheme.
The NFU’s president called for an urgent review into the ETII, stating that it was “irresponsible that the ETII scheme completely overlooks food production, not to mention it being wholly at odds with the government’s own ambition to produce more home-grown fruit and vegetables.
“An urgent review into the ETII is needed to ensure that essential and vulnerable food producing sectors, such as protected horticulture and poultry production, do not face a cliff edge when the Energy Bill Relief Scheme ends later this month,” she said.
In the letter, the NFU asked for improved support for capital investment in order to alleviate costs for farm businesses and drive crucial investment to enhance productivity. This would mean an extension to the Annual Investment Allowance to include structures and buildings or increase the general rate for structures and buildings to 10%, to encourage small business investment in UK agriculture.
While companies incurring qualifying expenditure on the provision of new plant and machinery on or after 1 April 2023 but before 1 April 2026 will be able to claim one of two temporary first-year allowances. These allowances are:
● A 100% first-year allowance for main rate expenditure – known as full expensing
● And a 50% first-year allowance for special rate expenditure.
The NFU’s statement said that it was disappointed that this measure is only available to limited companies and that there was no apparent recognition that businesses need to balance capital investment between equipment and physical infrastructure which is still written off over 33 years for tax purposes.
The NFU was pleased that the chancellor announced to extend the cut in the rates of fuel duty that was first introduced in the Spring Statement in March 2022 for a further 12 months.
The full statement can be read here: https://www.nfuonline.com/updates-and-information/spring-statement-2023-nfu-analysis/