NEWS: How will the budget affect the countryside?

Mark Rowe investigates whether the budget will make the Chancellor a Darling of rural dwellers

Gloucestershire floods

The budget had several implications for countryside issues. Overall, the response from countryside organisations was, as would be expected, mixed, and dependent on the extent to which the budget supported the main issues that these groups champion. From a general perspective, Ruth Davis, head of climate at the RSPB, cautioned that: “There are signs of progress, but overall this budget shows the government still has not grasped the scale of the environmental challenge.”


The proposal to deliver universal broadband access by 2012, which will benefit farmers and rural inhabitants, was widely welcomed. However, the National Farmers’ Union (NFU) was one of several organisations to express concern at the plan for an additional £75m of savings to be found at Defra. The Wildlife Trusts expressed concern that, as a consequence of the budget, local authority spending on ecological schemes might be squeezed.

The extra 2p in fuel duty has met with a mixed response. It was criticised by those who say that rural transport is so poor that many people have little choice but to use a car and that, with rural incomes generally lower than urban ones, those in this position will be disproportionately penalised. But the move was welcomed by the Campaign to Protect Rural England (CPRE). “The Chancellor has shown courage, and done the right thing, by sticking to a 2p increase in fuel duty from September,” said the CPRE’s Ben Stafford. “But it’s vital he uses the revenue to fund maintenance of local roads, and to support bus, cycling and walking routes. Money targeted in this way will deliver real green dividends, and boost rural communities.”

From wind to nuclear power, green energy has a huge physical impact on the countryside. The government announced a further £535m to support offshore wind, but the move was given a lukewarm welcome. “The government will have to come up with more ambitious proposals if it is to meet even the 34 percent cut in greenhouse gas emissions by 2020 set in its carbon budgets,” said Mr Stafford.

Plans to expand new technology that would allow the UK to burn coal and gas but extract the associated greenhouse gas emissions before they enter the atmosphere were received more favourably. The government announced a £90m fund to pay for a demonstration of carbon capture and storage technology, a move welcomed by the RSPB, which said the move could be “the most significant step” the UK has yet made towards a low carbon economy.

The scheme to encourage people to trade in their old car for a new one was confirmed in the budget, but the CPRE was sceptical of its impact. “This will do little to help rural families that can barely afford to keep their current car on the road, let alone buy a new one,” said Mr Stafford. “It is a shame that the Chancellor took this route, and spurned the chance to support community-run low carbon car clubs.”

Measures taken – or not introduced – in the budget will have an impact on rural housing. There was no cut on VAT on building repairs and renovations, a decision which the CPRE argues will increase pressure to build housing on the countryside. “Making this cut and levying VAT at 15 percent on building on greenfield land could have boosted urban regeneration, while protecting our countryside from indiscriminate bulldozing by under-pressure developers,” said Mr Stafford.

Other moves in the budget will affect holiday home and second home owners. Holiday home owners with rural retreats stand to lose out because landlords will not be able to write off trading losses from holiday homes against their tax bill from next year. Benefits from capital allowances and capital gains will also be abolished.  Those who feel second home owners lead to the decline of villages, where houses are only occupied for a few weeks of the year, will welcome the move and argue that this may be one way in which local homes become more affordable and available to local people. But thousands of holiday cottage owners have viewed the purchase of a second home as an investment for their retirement. The move was described as a “tax bombshell” by the Country Land and Business Association.

The NFU’s reaction to the budget was broadly positive as it introduced several measures to support tenant farmers and landlords, funding for green technology and new investments. “This budget sees some positive moves for farmers and growers… agriculture can literally help grow the UK economy out of recession,” said NFU deputy president Meurig Raymond. But the NFU expressed concern about plans to streamline flood defence funding to the Environment Agency. “This is code for possible cuts which will damage our ability to protect vital productive farmland,” said Mr Raymond.


The government is to implement a range of unemployment schemes, and the Wildlife Trusts argues this creates an outstanding opportunity for such projects to be co-ordinated with the environmental voluntary sector. “The government should make sure that any schemes introduced are promoting and involving people in the restoration of the natural environment,” said Stephanie Hilborne, chief executive of the Wildlife Trusts. Volunteering is the lifeblood of organisations such as the Wildlife Trusts, which presently has more than 38,000 volunteers, and such schemes could involve practical land management, making bicycles and installing energy efficient measures into houses.