Yesterday (26 November) the Chancellor of the Exchequer rose to deliver a Budget, already among the most heavily trailed in recent years, that the Office for Budget Responsibility had somehow managed to leak in full half an hour before she started.
While what the Chancellor produced contains several measures of significance to rural communities, it falls short of offering the coherent rural strategy the countryside urgently needs. The Countryside Alliance engaged extensively with the Treasury ahead of the announcement, pressing the Chancellor to avoid disproportionate burdens on rural households, farmers and rural businesses. Some of our recommendations were listened to but on the most critical issues, the government has regrettably chosen not to act.
Despite widespread concern across the farming sector, the Chancellor has refused to reverse last year’s controversial reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR). These changes – dubbed the Family Farm Tax – will still come into force in April 2026.
A minor adjustment was announced: the £1 million allowance for the 100% APR and BPR rates will be transferable between spouses or civil partners. While helpful for some, this tweak offers little comfort to many family farms, especially those where a spouse has already died.
We remain deeply disappointed that the Chancellor has not heeded the warning from farmers and rural organisations. Without meaningful reform, these changes continue to threaten the intergenerational viability of family farms.
The Budget made no commitment to rural proofing fiscal policy. This omission underscores the importance of our campaign to reconnect government with the countryside: introducing a Rural Community Impact Assessment of new policies, an annual State of the Countryside report, and a designated Countryside Champion within government. Had such processes been in place, it is hard to imagine the Family Farm Tax ever being approved.
The government has followed through on its commitment to lower business rates permanently for retail, hospitality and leisure (RHL). From 2026-27, RHL businesses will pay rates 5p lower than other sectors, benefiting over 750,000 properties. This is particularly welcome news for rural high streets and village pubs.
However, the Chancellor declined to extend the alcohol duty cut to non-draught products, opting instead to increase alcohol duty in line with the Retail Price Index (RPI) next February. This was a missed opportunity to support rural pubs further.
Amid speculation about a single gambling tax, we are relieved that the Chancellor has opted against a unified regime. Remote Gaming Duty will rise sharply but horseracing bets will remain taxed at 15%, protecting a vital funding stream for the sport. We continue to support the racing sector’s call for reform of the Horserace Betting Levy.
While the scrapping of certain energy levies is expected to save households around £150 a year, the government has refused to reduce VAT on domestic or business heating oil, despite the disproportionately high reliance on oil heating in rural areas. This remains a significant source of unfairness for off-grid rural households.
The 5p fuel duty cut, first introduced as a temporary measure in 2022, has been extended to August 2026 with inflation-linked increases cancelled for next year. While it welcome that fuel duty will not immediately rise, we maintain the position that the current rate should be recognised as the permanent baseline.
The Chancellor also confirmed that electric vehicles will soon face a pay-per-mile Electric Vehicle Excise Duty. As proposed, the system risks failing to account for the realities of rural life: longer journeys, limited public transport, and reduced access to EV charging. A consultation has been launched, and we will be pressing hard to ensure rural needs are built into its design.
Importantly, there were no changes to red diesel rules and no introduction of a weight-based vehicle purchase tax, two outcomes we warmly welcome.
The Budget included several broader policy changes with rural implications:
Despite pockets of good news, the Budget ultimately falls short of what the countryside needs. There is no clear plan for improving rural productivity, rural services or the long-term resilience of our farming sector. Policymaking continues to overlook rural realities - highlighting, yet again, the need for proper rural proofing at the heart of government.
The Countryside Alliance will continue pressing the Chancellor and the wider government to pursue fair, practical and evidence-based policies for everyone who lives and works in the countryside.