NFU
The NFU was ambivalent about this year’s budget. On the one hand, it argued that the biofuels rebate would go some way to helping the sector. On the other, it was upset about increased excise on 4x4s and red diesel.
The budget outlined an increase in car tax for band G vehicles and increases on red diesel duties. With many using 4x4 vehicles for essential farm work, the NFU will be calling on government to find a way forward to preserve the legitimate use of working vehicles.
The Vehicle Excise Duty for band G will see an increase from £210-230 to £300 this year and a further £100 increase to £400 by next year. Only vehicles registered from March 2006 are included, so farmers with older 4x4s will not be affected.
Red diesel tax will increase by two pence per litre from October, although the differential with other types of fuel is maintained,
The budget also provides good news for the sector, with the duty rebate for biofuels being retained at 20p per litre until 2010 and a two percent discount in the percentage of the list price used in calculating the taxable benefit for company cars running on E85 ethanol, which was called for by the NFU.
The Soil Association
The Soil Association found occasion within the budget to blast several usual targets.
It argued that the budget did not present harsh-enough proposals to curb aviation. It also rounded on ‘agriculture and food - which, combined, account for 18 percent of the UK's total annual greenhouse gas emissions.’
“According to the Government, agriculture alone accounts for 8 percent of greenhouse gases, and is the single largest UK source of methane and nitrous oxide,” the association said. Manufacturing nitrogen fertiliser, it claimed, is the biggest single energy use in agriculture, taking up 37 percent of all energy used, pointing out that for every one kilogram of fertiliser produced, nearly seven kilograms of carbon dioxide are produced.
The Chancellor extended the lower duty on biofuels produced from industrial agricultural crops such as oilseed rape, sugar beet and wheat until 2010, which the SA dismissed, saying he had been ‘duped’.
The SA dismisses the potential of biofuels, saying that The Organisation for Economic Cooperation and Development (OECD) had calculated that Europe would need to plant more than 70 percent of its total arable land with biofuel crops to increase the amount of biofuel currently used in road transport by just 10 percent.
NFU Scotland
The NFUS chose to attack the increased duty on 4x4s under Vehicle Excise Tax, arguing that essential users like farmers should be exempted.
“A doubling of Vehicle Excise Duty, on top of a further two pence increase in fuel duty, is an unacceptably heavy penalty for individuals with no practical alternatives,” said NFUS President Jim McLaren, “Having stressed that point to the Chancellor in my recent letter to him, I am hugely disappointed that he has not sought to exempt essential users.”
FSB
The Federation of Small Business said it was ‘dismayed’ by Brown’s budget.
“He gives with one hand and takes with the other,” noted Carol Undy, FSB national chairman saying: “However, this year, after some welcome initiatives for our members he throws it all away with a tax hike aimed at small businesses. Corporation tax was cut for large firms but increased for smaller ones. Small businesses employ 58 percent of the private sector workforce - over 12 million people - and the increase in their tax rate fails to acknowledge their contribution.”
Defra
Defra used the occasion to claim that the budget lays down a path for a British transition to a low-carbon economy, saying that Brown’s proposals to hammer 4x4s, and the rise in Landfill Tax would encourage the development of alternatives to landfill and the decision to promote biofuels was helping the country become among a handful on-track to meet their Kyoto 2010 obligations.
HTA
The HTA also chose to focus on the implications for small business. Andrew Maxted, HTA director of commercial services argued: “The 1% rise in corporate tax for small companies is yet another unwelcome increase in small business costs. This comes at the same time as an ahead of inflation rise in the national minimum wage and other large cost increases. Small companies are going to find it very difficult.”