Treasury chief kept abreast of concerns

THE well publicised plan to balance the UK budget within the lifetime of the Parliament yesterday saw farmers' leaders from both north and south of the border meet Danny Alexander, UK Government's Chief Secretary to the Treasury.

Their purpose was to put forward the central role that rural businesses can play in the nation's economic recovery.

NFU Scotland president, Jim McLaren, and his English counterpart, Peter Kendall, said they fully expected tougher economic conditions for farming but said there were a number of areas in which they believed the Treasury could help stimulate and sustain economic activity and investment in rural areas.

Both presidents agreed, the meeting which was held in London provided an opportunity to hear at first hand the scale of budgetary cuts and how these are likely to affect Defra and its operations.

McLaren said that, despite the general gloom created by the current financial situation, it was reassuring that the door of the Treasury remained open to the farming industry to discuss how current or future measures may affect farming and food production.

"The agricultural sector is not immune from the impact that the Treasury led budgetary cuts will have on all industries but this meeting allowed us to investigate if all opportunities to either stimulate farming businesses or strip out unnecessary costs or damaging taxation are being explored," he said.

He added that the key issue remained the devolution of the animal health and welfare budget. Currently this lies within the remit of Defra but that body will have its budget cut by one third.

"With cost and responsibility sharing with regards to animal health on the agenda both north and south of the Border, it is essential that the loss of 1 billion from Defra's coffers will not impact on a fair share of the animal health budget coming to Scotland."

According to NFU Scotland, the meeting also discussed rural transport and the proposed fuel duty regulator which emerged from the recent budget.

"It was good to hear more detail on the potential for establishing a fuel duty regulator. The prospect of a trial in rural areas of a reduced rate of fuel duty will be welcomed by all that live and work in the countryside," said McLaren.

"There is real merit in examining the options for a regulator as changes to fuel duty could make a major difference to small businesses and rural populations at a relatively low cost to the Treasury."

Kendall also welcomed the opportunity to meet one of the key men who have the responsibility of balancing the nation's books. "I stressed how we're at the heart of this enormous challenge. We're part of the biggest manufacturing sector in the UK - worth 22bn a year - and are determined to play our part in the economic recovery. Key to that, though, is having a policy and tax framework that enables us to compete, to make profits and to invest for the long term."

While he did not envy the task facing Alexander and his colleagues, Kendall was confident that the coalition government recognised the critical role farming plays across a whole range of policy fields.

"We've already seen commitments that will bolster the sector's competitiveness - plans to get rid of burdensome red tape for example and the science minister stressing that R&D is at the core of getting the country back on its feet.

"But we also need the Treasury to watch for unintended consequences of tax simplification; it would be a real disincentive if the farming partnerships that make up the bulk of our sector end up being disadvantaged by measures aimed at boosting business."