RURAL ECONOMY LEFT LYING ON A TROLLEY IN THE CORRIDORS OF THE TREASURY

Rural reaction to today's budget is likely to be a story of missed opportunities and being left waiting on a trolley in the corridors of the Treasury. Gordon Brown has clearly signalled that his own stated ethos of increasing "business and economic activity" does not extend to the countryside because he has not been prepared to introduce the tax simplification needed to break down the barriers to rural enterprise.

Tax barriers to rural diversification have not been removed or reduced and little has been done in relation to environmental issues or renewable fuels. Rural communities want help to help themselves but no significant effort has been made on their behalf.

Indeed the CLA will be watching with interest how the rise in National Insurance contributions impacts upon rural communities and will be keen to assess whether the provision of services to rural communities matches the higher payments.

President of the Country Land and Business Association, Sir Edward Greenwell, said:

"The CLA will shortly be calling for the Government to demonstrate its commitment to removing fiscal barriers in the rural economy, to parallel what he has announced today for the urban corporate sector. The need for this commitment has already been made clear by the Curry report.

"The Chancellor has today effectively excluded the rural economy from his "community of entrepreneurship" because his reforms affect only corporate business. There are 1 million rural businesses, 99% of which employ less than 50 people - primarily sole traders and partnerships. These small rural businesses will not benefit from his cuts in corporation tax but will pay the newly increasing National Insurance contributions.