Written by Alistair Driver
Relief was the main emotion among the farming community in the initial response to the Budget, after Rishi Sunak announced he would not be scrapping the red diesel duty relief for agriculture.
While the red diesel exemption will be scrapped for some sectors in two year’s time, it will remain for agriculture, Mr Sunak announced, citing lobbying from the NFU as key to his decision.
The budget saw a big increase in Government spending for infrastructure, including for rural roads, plus a £30 million package to help businesses survive the economic effects of the coronavirus outbreak, including:
- Statutory sick pay for ‘all those who are advised to self-isolate’ even if they have not displayed symptoms
- The government to meet costs for businesses with fewer than 250 employees of providing statutory sick pay to those off work due to coronavirus
- A temporary coronavirus business interruption loan scheme for banks to offer loans of up to £1.2m to support small and medium-sized businesses
Industry Reaction
Rebecca Davidson, rural affairs specialist at NFU Mutual said: “Relief is being felt across the farming sector that the Chancellor did not remove the Red Diesel concession for agriculture as such a move would have been a major threat to our farmers.
“They are already facing a series of complicated and costly challenges to increase food production post-Brexit while at the same time changing the way they farm and become carbon neutral by 2040.
“Tractors being produced today have sophisticated engines which produce much lower emissions than older models. However, they cost a lot of money – and increasing farmers’ costs by reducing the red diesel rebate on duty at the same time as the Basic Payment Scheme being cut would have limited farmers’ ability to invest in new, safer, and more environmentally-friendly equipment.”
“We welcome the investment in alternative fuels and hope that funding for innovation will be directed toward Agri-tech to help agriculture achieve environmental goals.”
On the investment in rural roads, she added: “For too long there has been a disparity between funding for national and local roads. While we welcome the investment of £2.5bn to fix potholes and resurface roads over five years, we will be looking very carefully at the detail to ensure funding is directed across the rural road network which is essential for rural businesses and gives people in the countryside vital access to schools, healthcare and other services.
“In short, rural roads are the arteries of the countryside and if they are unusable it will have serious implications for country people.”
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