The National Farmers’ Union (NFU) welcomed the postponement of the increase in fuel duty in yesterday’s Budget, but has expressed unease at what appears to be a strong undercurrent of hostility to biofuels in what was supposed to have been a ‘green’ Budget.

NFU deputy president Meurig Raymond said: “We are relieved the Chancellor has listened to the voices from across the whole spectrum of industry, transport and farming that were urging him not to add fuel duty to the fire of inflationary cost increases. However, we still believe the increase should not merely be postponed, but scrapped altogether, and we will continue to lobby for that outcome.

“However, we are concerned at what appears to be a strong undercurrent of hostility and lack of understanding to British produced biofuels, which runs through the Budget small print. The loss of the biofuel duty differential of 20ppl in 2010 creates investor uncertainty, and the lack of clarity on how long the Renewable Transport Fuel Obligation will be in place after 2010 is further stifling investor confidence in financing multi-million pound biofuel plants in the UK. There are other worrying indications that ministers and officials are paying too much attention to the myths that surround biofuels, and not enough to the facts.”

Raymond also expressed disappointment that the government had not responded to the NFU’s repeated requests for a re-think on the proposed withdrawal of the Agricultural Buildings Allowance between 2008 and 2011, and that there were no further concessions on the capital gains tax regime.

However, the announcement of a period of further consultation on the proposal to legislate on “income shifting”, which could potentially have imposed from April significant additional administrative burdens on family farm partnerships and companies, was welcomed by the NFU.

Topics