The Chancellor of the Exchequer, John Healey MP, rose in the House of Commons yesterday for the premier fiscal event of the year: the 2026 Budget.
The Budget offered the Chancellor the chance to reset the government’s relationship with the countryside. As part of the Campaign for the Countryside, we wrote to him making ten specific requests for measures that we believed would help him do so. The Chancellor, however, showed little interest in seizing that opportunity.
Extending small business rates relief could help rural businesses, but coupled with hikes in employment costs it remains to be seen whether hardworking rural business owners will see any real benefit. Additionally, while temporarily extending the red diesel duty cut and suspending tariffs on kerosene heating oil and fertiliser are welcome moves, it will come as little solace to farmers still facing enormous threats to their livelihoods.
Before becoming Prime Minister, Andy Burnham pledged to revisit the hated Family Farm Tax. He has failed to do so. This tax continues to tarnish the government’s rural record. It is preventing farmers from making important decisions about their livelihoods, hampering the government’s own mission of creating good growth in every postcode. Working with the custodians of our countryside, the Countryside Alliance will continue vocally to oppose this tax and call for its abolition.
Farmers have been encouraged for years to diversify their businesses by creating holiday lets, among other measures; but anyone who has done so is now being punished by yet another increase to the property income tax paid on such lets, further threatening the viability of their business.
At a time when the government should be increasing support for farmers and in the wake of last month’s Sustainable Farming Incentive fiasco, it has slashed Defra's funding for 2027-28 by £100m.
This Budget does little to give “breathing space” or fresh hope for the countryside. If the government is serious about generating growth in every postcode, including in the countryside, it must urgently address the plethora of problems facing rural businesses. Scrapping the Family Farm Tax is the only way to turn a new leaf.
The Countryside Alliance has produced a full briefing to help MPs navigate the Budget debate in the days to come.
Photo credit: House of Commons