A date to remember for farmers
Friday 13th December 2019 is a date which is likely to be remembered for many years. For younger clients, it will be the biggest political landslide in a lifetime, and for all, it will be seared into the collective memory.
Many will be grateful to see the risk of huge tax increases for the better off receding, along with the spectre of partial land nationalisation and a return to the levels of state sector control last seen in the 1970s. We should also have a much more stable basis for forward planning, at least for the next five years along with the likelihood of a “Brexit boost” for businesses as deferred capital expenditure is at last released.
Re-introduction of Agricultural Bill
On the other hand, it seems probable that the Agriculture Bill will be re-introduced and will rapidly pass into law. Direct payments will be removed over a window (presumably still seven years) and new trade agreements will have an impact on agricultural prices. How the government will balance consumer prices, food quality and farm profitability in the context of wider trade agreements remains a cause for concern.
In the medium term, the election will continue to have implications. The campaign has highlighted pressures in government spending plans and although the pledges are on a different scale to some that were proposed by opposition parties, there will be a need for new sources of tax to fund the promises made (and others such as long term care). With key taxes fixed by the “triple lock”, increases in some of the areas of capital cannot be completely ruled out.
Farm reorganisation and streamlining
While some questions may have been settled, the political landscape has changed and new challenges may emerge as government policies alter with a view to retaining some of the swing votes for the future. It should not be assumed that agriculture will be at the forefront of government thinking in that process. On the basis of “hope for the best and prepare for the worst”, time spent thinking about farm reorganisation and streamlining would not necessarily be wasted.