Here’s a quick-fire ‘need to know’ on the Autumn Budget announcement on 30 October 2024, related to farming and the countryside. See also this digest on food and health.

General economic headlines:

• Taxes will be raised by £40 billion pounds: But government will not increase employee’s NI, income tax or VAT.
• The budget deficit will be gradually reduced and by 2029-2030 is projected to be in £9.9 billion surplus (this would be in the next parliament)
• OBR projects GDP growth to be between 1.1% and 2% in the years to 2029.

Farming and the countryside: 

• Defra budget is to remain at £2.4 billion – a relief for many. Although with no increase this is in effect a real terms decrease due to inflation. It’s worth noting too that a 2% ‘productivity, efficiency and savings’ target has been set for all departments to meet next year, by joining up departmental work – we’ll wait to see whether this means more integration for health, climate and farming.
• Another big headline for farming is reform of agricultural property relief and business property relief: From April 2026 farming assets over £1m will now face inheritance taxes. “IHT will apply with 50% relief at an effective rate of 20%”. The Chancellor said this would not affect three-quarters of farms and would protect small family farms, but many farmers are likely to dispute this. This could well see larger farming businesses broken up, although at current average lowland land prices this would apply to farms larger than about 100 acres, which is not very big.
• Farming businesses may struggle with the plan to increase minimum wage by 6.7% to £12.21/hr with a single adult wage phased in. Those with high labour costs and low margins, such as horticulture, will feel the pinch.
• Business costs will also rise thanks to increases in employer NI, although the smallest companies will gain some protection.
• No increase in fuel duty – food sector will be pleased.
• Labour’s commitment to build 1.5 million homes was reiterated, with the Chancellor’s promise to “to get Britain building again” – what will this mean for the countryside and land use?
• There was also lots of talk of roads and train lines, and it’s unclear what this might mean for the countryside.

Emily Norton, Our new Policy Champion for Land, Agriculture and Carbon, said;

“Speculation around reform of Agriculture Property Relief was rife leading up to the Budget. The Chancellor’s speech indeed confirmed that reform is on the cards, albeit with protections for smaller farms. Government has also committed to follow up on the previous administration’s promise to extend inheritance tax reliefs to environmental land uses. This addresses an important barrier to change of land use to meet environmental outcomes. 

“The Chancellor also announced further funding for nutrient mitigation for local authorities impacted by nutrient neutrality requirements. This is a nod that the new government is committed to pursuing nature-based solutions as an enabler for economic growth.”

See also this digest on food and health.