Andrew Connon, president of NFU Scotland (NFUS), has written to Chancellor Rachel Reeves MP calling on Government to address fiscal policies impacting agriculture.
NFU Scotland has warned that UK Government tax decisions are putting the future of Scottish farming and food production at risk.
In a formal letter to the Chancellor, Rachel Reeves MP, NFU Scotland president Andrew Connon has expressed deep concerns about the fiscal measures announced on 30th October, which, he says, are already having a damaging impact on food security, agricultural investment, and the viability of rural businesses across Scotland and the wider UK.
NFU Scotland requests talks with Chancellor
The Union is now calling for urgent talks with the Chancellor’s team to discuss practical changes that would reduce the negative impact on primary food producers, while still enabling the Government to meet its objectives around public services and economic growth. With growing global uncertainty and rising inflation, NFU Scotland believes swift action is vital to protect the future of UK food production and rural communities.
NFU Scotland claims that without changes to Government fiscal policy, there will be a “decrease in UK food production, leading to inflationary pressures for consumers and affecting numerous businesses connected to farming” as well as ”stalled and declining agricultural economic investment, causing long-term contraction of the rural economy and the decline of rural communities”.
“Farmers across Scotland are already pulling back investment.”
Andrew Connon, president NFU Scotland
Andrew Connon, president of NFU Scotland, said: “Farmers across Scotland are already pulling back investment, cutting jobs, and in some cases, being forced to walk away from their businesses.
“We understand the pressure on public finances, but if the Government wants economic growth, it must start with food security and the rural economy.”
The Union states that while economic growth is a key aim of the UK Government, current policies related to employer National Insurance Contributions (NICs), double-cab pick-up tax, the Carbon Border Adjustment Mechanism (CBAM), and Inheritance Tax (IHT) changes are reducing economic activity and causing a lasting decline in agricultural production.
Farmers are halting investments
Independent research cited by NFU Scotland from CBI-Economics involving more than 4,000 businesses and farms across the UK reveals that 49% of farms have paused or cancelled investments, 34% have deferred or reduced investment, and 14% plan to sell off assets or parts of their farms. NFU Scotland claims that Government policies “exacerbate the challenging conditions facing farmers”, posing serious concerns for the future of farm businesses and the wider rural economy.
NFU Scotland is calling on the UK Government to delay the increase to National Insurance Contributions (NICs) paid by employers for agricultural businesses; delay implementation of the Carbon Border Adjustment Mechanism (CBAM); exempt double-cab pick-up vehicles used by agricultural businesses from increased tax; and consider an alternative proposal to changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) for family farm businesses.
A copy of the letter can be read here.
