Newspaper article The Journal (Newcastle, England)

What Did the Comprehensive Spending Review Mean for the Rural North East? RURAL ECONOMY

Newspaper article The Journal (Newcastle, England)

What Did the Comprehensive Spending Review Mean for the Rural North East? RURAL ECONOMY

Article excerpt


ANALYSIS and reaction to this week's Comprehensive Spending Review has centred around matters of national concern, from the Chancellor's U-turn on tax credits to protection for police budgets and a boost for housebuilding. But anyone wanting to find out how the review affected farming and the wider the rural economy would have to look more closely.

One measure that has exercised farming groups in the days since George Osborne's speech has been the 15% budget cut to Defra, the Government department with direct responsibility for agriculture and the environment.

Coming at a time of worries about many of the Department's functions in the farming community, that cut has rung more alarm bells.

"The Chancellor has announced that the Defra day-to-day operating budget will be cut by 15% and we must wait for more details before understanding the full impact of this on farmers," said NFU chief economic adviser Gail Soutar.

"It is reassuring that the flood defence budget will be ring-fenced and that the Government will prioritise spending on animal and plant disease prevention, for example by continuing to invest in implementing its 25-year strategy to eradicate bovine tuberculosis.

"The Chancellor also said he would invest PS12bn in capital infrastructure and a boost to the Government's digital service. As part of this, he said he was introducing a digital tax account by 2020 to replace tax returns, including new reporting requirements, and a consultation on tax payment dates.

"We will be following this closely to assess its feasibility for our members.

We are disappointed that there was no mention of how farmers, many of whom are among the 5% who struggle with broadband access, will benefit from improved broadband facilities.

"It is absolutely vital that broadband services in this country are fit for purpose. We need a firm commitment from Government to deliver superfast broadband for all - what we don't need is an increased divide between urban and rural communities.

"We are pleased that the Chancellor said that tax credits would not be cut from next April, as previously planned, as this will help many farming families who are experiencing falling incomes.

"It is disappointing that the Government has decided to end the micro employer relaxation of PAYE 'on or before' reporting from April 2016. This will impose a significant additional burden on many agricultural businesses engaging seasonal workers at harvest time.

"Larger employers will, however, be concerned at the rate of the new Apprenticeship Levy of 0.5% of payroll costs from April 2017."

The Defra budget cut has also worried the CLA, the body which represents more than 33,000 landowners, farmers and rural businesses across England and Wales. …

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