The National Sheep Association (NSA) has claimed that the Autumn Budget offered “little reassurance” for sheep farmers.
It said this was despite the Chancellor signalling a shift toward raising taxation revenue from a broader range of taxpayers to reduce borrowing and invest in public services.
NSA chief executive Phil Stocker stated: “After so much anticipation, the Budget turned out to be an uninspiring event for the farming sector. Disappointingly, opportunities to make fundamental changes to farming inheritance tax policy were missed.
“Defra’s budget has declined slightly in cash terms, but once inflation is factored in the reduction is far more significant. I fear this could lead to missed opportunities across farming and land management. Doubt also remains over whether the revised tax thresholds will do anything to improve spending confidence or support economic growth. It is difficult to see how this plan will materially reduce national debt or bolster public services.”
NSA said that for farming specifically, the Budget contained “few positive developments”. A minor concession to agricultural inheritance tax (IHT) changes was confirmed, allowing the £1 million personal allowance to be transferred between spouses and civil partners where one individual died before 6th April 2026.
The trade association stated that this was a “welcome adjustment” to an otherwise unwelcome set of reforms.
NSA policy manager Michael Priestley commented: “The land-owning segment of our industry faces real uncertainty around the impact of these IHT changes. This is a major concern for NSA. There is still time to improve the system before legislation is finalised, and NSA will continue working with industry partners to champion more practical alternatives.”
The increase in minimum wage will add “further pressure” to farm businesses, NSA warned, stating that while many sheep farms rely on small teams or seasonal (lambing) staff, wage increases, when combined with rising input costs, risk “further squeezing margins”.
“Repeated uplifts in the minimum wage without broader economic support for primary production will hit labour-intensive businesses hardest.”
Phil Stocker, NSA
Stocker added: “Farmers recognise the need for fair pay, but repeated uplifts in the minimum wage without broader economic support for primary production will hit labour-intensive businesses hardest. This change, combined with reduced Defra resources, risks eroding the resilience of family farms.”
Looking to the Department for Environment, Food and Rural Affairs (Defra), NSA said the Government department’s resources were set to fall from £5 billion to £4.9 billion next year, reducing further to £4.7 billion in 2028/29. Internal allocations have yet to be set, but NSA expects departmental running costs to be trimmed. It said that even if current spending on farm schemes is maintained, NSA is concerned that with the budget overspent and some schemes closing in 2025, the 2026 allocation may be too limited to allow meaningful expansion when the Sustainable Farming Incentive reopens.
A one-year extension will be available for Higher Level Countryside Stewardship agreements ending this year, and Environmental Land Management schemes continue to be reviewed in full. Scotland, Wales and Northern Ireland are each set to receive a 5-6% funding uplift. NSA stated that it will “strongly advocate” for agriculture to receive a fair share of these increases across all nations of the UK.
