CLA concerned about negative impact of Budget on rural communities

National Living Wage and extending Right to Buy to Housing Association tenants among potential problematic moves, says organisation

CLA president Henry Robinson
CLA president Henry Robinson

The CLA has raised concerns about the impact of the summer Budget on rural communities.

The organisation, which represents landowners, farmers and rural businesses, in particular highlighted the inflationary pressure that would be created on employment costs by the new National Living Wage.

Its president Henry Robinson likewise flagged up a perceived lack of action to reduce the burden of tax on small unincorporated businesses.

“As a result of this budget farmers and other rural businesses are presented with significant inflation in their wage costs and the cut in corporation tax that is supposed to pay for it will not benefit them,” he said.

“We now need an urgent plan for how to ensure rural businesses are not left behind and jobs in rural communities are not put at risk.

“The Chancellor stated in the Budget that the new compulsory National Living Wage will be paid for by decreases in corporation tax.

“There are hundreds of thousands of family businesses in rural England and Wales that are unincorporated and therefore are taxed on higher tax rates.”

Mr Robinson also raised concerns about the proposed extension of Right to Buy to Housing Association tenants, saying that Ministers must exempt homes in rural communities from new powers or risk a catastrophic drop in affordable homes for local people.

“The housing crisis is most acute across rural England and Wales,” he said.

Mal CG/www.mcgimages.co.uk NFU chief economist Gail Soutar
NFU chief economist Gail Soutar

“Extending Right to Buy to Housing Association tenants would turn a challenging situation into a catastrophe and it is vital Ministers put in place a specific exemption from the policy for homes in rural communities.

“Across the countryside there are landowners that want to provide land for affordable housing; they understand that this means selling it at less than market value for this purpose.

“They will not do this if they know the homes will eventually be sold off into the open market and not kept for those in most need within their communities.

“In order to retain and deliver new homes that are desperately needed in rural areas, Government needs to develop a rural-specific housing strategy that tackles the major barriers such as slow and inconsistent adoption of local plans.

“We will work with Government to ensure that well designed rural homes are delivered in the right places.”

The NFU, meanwhile, found both positive and negative in its initial look at the budget’s implications - although it stressed that several announcements would still need to be explored in more detail.

The organisation’s chief economist Gail Soutar said: “We are pleased that the Chancellor announced that he would be setting the Annual Investment Allowance permanently at £200,000.

“The NFU highlighted the need for the government to set a long term, substantial level for AIA in our manifesto in order to give some security to our farmers and growers who can better plan for the future by investing in their businesses – which is particularly important during these volatile times.

“Unfortunately the current capital allowances system does not fully reflect the full cost of investment for farmers. We had hoped to see some progress on buildings and fixed structures that are considered wasting assets.

“Similarly reductions in corporation tax will have a limited impact on the 92.5% of farm businesses that are sole traders and partnerships.

“Like many people across the country, our members will be relieved that fuel duty will remain frozen for the remainder of the year.”

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