The triple effect of a significant rise in the National Living Wage, increases imposed on employers’ National Insurance contribution and the decision to change the rules on Agricultural and Business Property Relief have come with inadequate warning and little consideration as to the impact they will have.
In a year that has seen changes to border controls, leading to uncertainty of timings and hikes in the cost of importing plants combined with poor weather, the environmental horticulture sector has already had to deal with extremely challenging conditions.
In her letter to the Chancellor, Horticultural Trades Association (HTA) Chief Executive Fran Barnes expressed significant concerns over how the Budget’s measures will have a ripple effect on employment and investment and could be inflationary. The HTA found in its November survey that the majority of members will look to pass costs back through the supply chain, and over half still plan to freeze recruitment, with the same number again looking to reduce or postpone capital investment.
According to the HTA, the National Insurance Contribution and National Living Wage increases coming in just 6 months’ time, will cost HTA members £134 million. In addition, Agricultural and Business Property Relief changes will further hit the sector and businesses’ ability to plan, invest and set out a sustainable future. “The new Budget announcements present a further triple hit to the sector, compounding existing issues”, explains Barnes in her letter.
Barnes commented: “Our members recognise the context of the Autumn Budget; however, the impact of huge cost hikes within such a short timescale when business budgets have already been set, and buying has been agreed for the next year will inevitably impact jobs and investment. Sector businesses themselves have had difficult operating conditions, which have mounted over recent years.
“In the letter to the Chancellor, we strongly urge that the government pause the plans to review and consult fully with those impacted and have a comprehensive view to recognise the cumulative impact of multiple announcements. It is imperative and responsible to ensure adequate lead times for policy changes. The government needs to work with us to create conditions where we can deliver our shared green growth ambitions and continue delivering jobs for local communities and the economic and health benefits the sector brings.
“Our sector, by producing the trees and plants we depend on, is the solution to so many of the economic, health and environmental challenges the government is facing, but these cumulative announcements with no scope for business planning will create destabilising uncertainty and ultimately hinder growth.”