NFU Scotland has sent a letter to Chancellor Rachel Reeves MP urging Government to address fiscal policies impacting agriculture.
The Union has warned that UK Government tax decisions are putting the future of Scottish farming and food production at risk. In a formal letter to the Chancellor, NFU Scotland President Andrew Connon has expressed deep concerns about the fiscal measures announced on 30th October, which, he says, are already having a damaging impact on food security, agricultural investment, and the viability of rural businesses across Scotland and the wider UK.
In a statement, NFU Scotland says that it has already set out these concerns to the UK Government but due to the urgency of the situation is now calling for urgent talks with the Chancellor’s team to discuss practical changes that would reduce the negative impact on primary food producers – while still enabling the Government to meet its objectives around public services and economic growth.
NFU Scotland believes action is needed to protect the future of UK food production and rural communities. The UK Government aims to improve public finances, and NFU Scotland understands that tax rises are necessary for rebuilding public services and stabilising finances. However, without changes, it argues that the following issues are inevitable:
- Decrease in UK food production, leading to inflationary pressures for consumers and affecting numerous businesses connected to farming.
- Stalled and declining agricultural economic investment, causing long-term contraction of the rural economy and the decline of rural communities.
“If the Government wants economic growth, it must start with food security and the rural economy.”
Andrew Connon, president of NFU Scotland, said: “Farmers across Scotland are already pulling back investment, cutting jobs, and in some cases, being forced to walk away from their businesses.
“We understand the pressure on public finances, but if the Government wants economic growth, it must start with food security and the rural economy.”
According to NFU Scotland, current policies related to employer National Insurance Contributions (NICs), double-cab pick-up tax, the Carbon Border Adjustment Mechanism (CBAM), and Inheritance Tax (IHT) changes are reducing economic activity and causing a lasting decline in agricultural production.
To secure food production, food security, and farm business viability, NFU Scotland calls on the UK Government to:
- Delay the increase to National Insurance Contributions (NICs) paid by employers for agricultural businesses: This change will add significant costs throughout the supply chain, raising serious questions about British food security and impacting food supply and prices.
- Delay implementation of the Carbon Border Adjustment Mechanism (CBAM): Engage with the sector to discuss its impact on farm businesses, as the CBAM will increase fertiliser costs, putting further pressure on farm viability.
- Exempt double-cab pick-up vehicles used by agricultural businesses from increased tax: Treating these vehicles as cars for tax purposes from April 2025 imposes additional costs on farming operations where pickups are essential.
- Consider an alternative proposal to changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) for family farm businesses: NFU Scotland urges the UK Treasury to adopt a taxation approach that supports family farm businesses, food security, and rural communities without compromising necessary tax revenue.
A copy of the letter is available on the NFUS website and accessible here.
