Budget: Ensuring the survival of the rural economy

All eyes were on the Prime Minister earlier this week as he revealed how we will move through a stepped approach to lift lockdown as part of a road to recovery.

Since then, the focus has shifted to the man at 11 Downing Street, Chancellor Rishi Sunak, and what he will do to bolster the economy.

The CLA has continued to lobby the Treasury on several fronts to ensure that the rural economy is given the best chance to recover from the seismic shock of Covid-19.

Tourism will play a role in this. Many Brits are desperate to get away from home but remain in the UK due to international travel restrictions. Rural tourism lost an estimated £20bn in revenue last year; however, businesses received a lifeline in the form of a reduction in VAT to 5% for tourism and hospitality business, which was the difference for many between loss and breaking even. We have made the case for the VAT cut to be made permanent to encourage domestic tourism and to showcase how Cornwall can compete with Tuscany.

The Business Rates holiday has also proved essential for many rural businesses’ survival. Now is not the time for this to end when many businesses have not taken any income this year.

The schemes put in place to aid businesses during the pandemic - such as the furlough scheme, business interruption loans and payment holidays – have, in many cases, prevented them from closing permanently.

We have made clear to the Treasury that rural businesses need to make a profit before this vital support is removed.

The country needs stability and a path to recovery from the 2021 Budget, following an incredibly uncertain 12 months. Of course, there will be a time when expenditure will need to be repaid, but the economy must take baby steps before then.

We will provide a full breakdown of the Budget and what it means for our members after it is announced next Wednesday, 3 March.