The coronavirus lockdown has pushed the UK into its first recession in 11 years
Farming businesses are ready to help the economy get back on its feet but could find themselves hit by measures to bring the UK out of recession.
The UK economy shrank by 20.4 per cent between April and June due to lockdown pushing the country into the first recession in 11 years.
The number of people in work fell by 220,000 between April and June with a record quarterly drop in the number of self-employed workers.
However, for many food and farming businesses recession seemed ‘a long way away’, according to Rob Hitch, partner at Dodd and Co accountants.
“They are some of the businesses that, on the whole, have been winners during the last six months, apart from some notable losers in dairy and ornamental sectors in particular,” he said.
“Farmers normally benefit from recessions as the value of sterling is kept low, keeping output prices for commodities often traded in US$ high.”
However, he said the bigger question was what would happen to rectify the recession.
“We know we have had consultation into changes to Inheritance Tax, and even suggestions of radical reform, and there is currently an open consultation by the Office of Tax Simplification into Capital Gains Tax.”
He asked whether after 40 years of ‘relatively benign capital taxes’ changes would be made to help raise funds from some of the sectors least affected by the recession.
CLA director of external affairs Jonathan Roberts said: “Those working in the rural economy are ready and raring to go. We want to help the economy get back on its feet but we need greater support to allow us to do so.
“The rural economy is currently 16 per cent less productive than the national average. Closing that gap could be worth £43bn. From better digital connectivity to planning reform, we need the tools to get the economy moving,” he said.
He added farmers had continued to feed the nation despite labour shortages and disrupted supply chains and the VAT cut was helping tourism.
“So we have proven that the countryside is a resilient part of our national economy. Government should now focus on making it one of the most prosperous parts of our economy too.”