Chancellor George Osborne's plans for employers’ National Insurance (NI) to be reduced by an equivalent of £2,000 per employee from April 2014 have been welcomed by the horticultural industry.
NFU president Peter Kendall says the sanction, revealed in yesterday's 2013 Budget, will benefit up to 40,000 rural businesses in both England and Wales.
Other positive proposals for farmers and growers included a cancellation of a fuel rise in September and the government's pledge to invest £1.6 billion over the next decade in its Industrial Strategy. This will include an investment of £500 million in sectors, including agricultural technology and sciences, where the UK already has a global advantage.
Henry Robinson, deputy president of the Country Land & Business Association (CLA), has welcomed the tax cut.
He said: 'Many of our members are running small or medium-sized firms in the countryside and this measure - described by Mr Osborne as the Budget’s largest tax cut - could prove a big boost to the rural economy.
'People in the countryside are more reliant on their vehicles than city dwellers, so the fuel duty rise would have been a bitter blow for rural communities. It is great it has been scrapped.”
Meanwhile, Nigel Parsons, MD of rural business accounts specialist Landmark Systems, added: “Our clients have watched their overheads in almost every area rise significantly in the last 12 months and that has put enormous pressure on countryside businesses.
“These tax adjustments will provide a welcome glimmer of hope in an otherwise difficult financial climate.”
However, Kendall wasn't completely happy with the Budget and has criticised the government for not announcing any significant investment plans for horticulture, which he says would have provided a 'much needed' boost for the UK food industry's security and ability to grow internationally in the wake of the recent horsemeat scandal.
Kendall explained: “I am disappointed to have heard so little from the Chancellor that will give our farmers and growers the confidence they need to invest in their businesses.
'Last year’s Autumn Statement contained the welcome announcement on the Annual Investment Allowance, and this is already encouraging plant and machinery expenditure in agriculture. Today’s Budget failed to deliver equivalent measures for farm buildings and infrastructure.'