The Chancellor’s vision of a “fairer society” and “securing opportunity for all” was last week refuted by Farmers’ Union of Wales president Gareth Vaughan.
“I was bitterly disappointed that the Chancellor had not heeded our warning and that the proposed repeal of the Furnished Holiday Legislation (FHL) has been enacted,” said Mr Vaughan.
The move will mean that FHL businesses will cease to be treated as a trade for capital gains tax, roll-over relief, and entrepreneurs’ relief.
“Scrapping these benefits will seriously affect the income of the many FUW members who have diversified into letting out holiday accommodation.
“Some of whom have done so after acting upon past government advice which encouraged diversification into the tourism industry.
“It, therefore, seems rather unfair that they will now be penalised for doing so.
“But I must add that relief may be available in the short-term, and FUW members are urged to think carefully about what they want to do before April next year and seek professional advice as soon as possible,” added Mr Vaughan.
“VAT was expected to return to 17.5% but there was a further blow for the agricultural industry as the Chancellor announced an additional 0.5% increase in National Insurance, making the increase 1% from April 2011.
“This move will further increase the cost of employment on farms as well as hitting self-employed farmers.
“Whilst it is forecast that the economy will be out of recession by then, I believe that adding to employers’ costs will not help sustain the recovery,” said Mr Vaughan.
He also questioned Mr Darling’s logic when he said that “to promote growth, we need to invest in the dynamic sectors of the future – in digital, bio and low-carbon technology”.
Mr Vaughan added: “Whilst climate change experts in Copenhagen were warning that ‘millions will go hungry by 2050’ I found it difficult to believe that the Chancellor failed to announce any measures that would promote growth within the sector that faces the formidable task of feeding a growing nation whilst tackling the effects of climate change.
“In fact, there was little that he announced yesterday that would give farmers the confidence to invest in their farming businesses.
“On a slightly more positive note, I was glad that agricultural property retains its exemption from Inheritance Tax and I welcome the extension of empty property relief.”
The union also welcomed the decision to introduce a duty of 50p a month on all phone landlines. This levy is to finance the availability of super-fast broadband to 90 per cent of the population by the end of 2017.
“The FUW has long campaigned that the lack of effective broadband in many parts of Wales is putting rural businesses at a severe disadvantage. I hope that this move will eradicate any black-spots that currently exist in Wales,” said Mr Vaughan.
“Access to a fast internet connection is also becoming an increasingly useful tool for farmers with registering cattle movements online a regular task.
“So, it is vital that we have effective access to broadband technology to carry out these tasks quickly and efficiently.”
The Government will defend its report by referring to the need to support industry and commerce through a recessionary period by reducing their costs, and retaining public expenditure to stimulate demand and expedite the economy’s return to positive growth.
Mr Vaughan concluded: “Past failings have meant that this pre-budget report was a fine balancing act, but I fear that reality is just around the corner and that worse is yet to come with many difficult and unpopular decisions postponed until after the looming general election.”
