Budget 2017: Reaction from Wales and Scotland

The hike in National Insurance (NI) contributions has been particularly controversial, with Plaid Cymru’s shadow Cabinet Secretary for Rural Affairs, Simon Thomas, saying it would hit many farming businesses trying to face the impact and uncertainty of leaving the EU.

Farmers’ Union of Wales managing director Alan Davies agreed. He said: “This increase will hit farmers across the UK badly, and that at a time when they are already having to cope with an increase in business rates, which of course is devolved to Wales, but the increase in NI contributions is not.

“Add to that the uncertainty around future agricultural support and those making a living from agriculture are not being put in the most favourable financial conditions.”

NFU Cymru president Stephen James said he would be working to make the Government aware of the implications of the rise for the sector.

He also raised concerns about the Government proposals on digitising tax, which he claimed would see many farmers hit with a ‘costly and burdensome’ process of accounting from April next year.

Scotland

NFU Scotland was equally worried about both issues.

Parliamentary officer Clare Slipper said: “For an industry like agriculture, where many farmers and agricultural workers are self-employed, the hike in NI contributions will hit incomes.

“For smaller farm businesses, there would have been some relief in the news that the Government will provide an extra year, until April 2019, before Making Tax Digital is mandated for those with turnover below the VAT threshold.

“However, that leaves VAT registered unincorporated businesses still facing early compliance and that will have an impact on the majority of farm businesses.”

Another concern raised by the Scottish union was the Chancellor’s decision to increase excise duty on spirits by nearly 4 per cent – 36p a bottle – given the effect this will have on Scottish barley growers who supply the whisky sector.