What was announced in the government's Spring Statement?
While the Spending Review in June seems to be a more significant moment for the future of the rural economy, we review what was announced in the chancellor's Spring Statement
Following the changes announced in the Autumn Budget, the CLA team were on guard for a difficult Spring Statement for the rural economy. However, the update presented little of note and did not include any tax commitments. Significantly there were no changes to business rates or red diesel, as some rumours indicated.
All major announcements, including news on future farming schemes after the sudden closure of the Sustainable Farming Incentive, will instead come with the Spending Review in June. The CLA has already submitted its views on this to the UK Government.
The statement instead focused mainly on changes to welfare and defence spending. It also highlighted the poor economic position of the UK, with the Office for Budget Responsibility (OBR) downgrading the UK’s growth forecast for 2025 from 2% to 1%. The chancellor will however welcome the OBR upgrading its growth forecast for the following years.
The most significant aspect of the chancellor’s speech was not a new announcement, but a reiteration of the government’s reliance on the Planning and Infrastructure Bill to grow the UK economy. The OBR has projected this to increase UK gross domestic product (GDP) by 0.2% by 2029-30.
The CLA is supportive of some aspects of the Planning and Infrastructure Bill, but it currently does not go far enough to promote small, sustainable development and includes concerning powers for compulsory purchase.
Country Land and Business Association (CLA) President Victoria Vyvyan said:
“More housing is desperately needed, but the government’s plans for more compulsory purchase at less than market value is tantamount to asking farmers to bear the cost of fixing a housing crisis they didn't cause."
Many CLA members would willingly put forward land for affordable housing development were it not for the expensive, slow and bureaucratic planning system. Overhauling the system must be an urgent priority for the government to unlock economic growth.
“We back the building of a small number of homes in a large number of villages to support sustainable and thriving rural communities, and this must not be overlooked in the drive to build 1.5 million homes in this Parliament.”