‘Living wage could make rural businesses go bust’

MINISTERS do not appreciate how rural businesses are set to be affected by the new national living wage, in a move which could see enterprises already operating on a financial “knife-edge” go bust, the president of the Country Land and Business Association (CLA) said.

Henry Robinson said many rural businesses will not benefit from corporation tax cuts and so will lose out from new national living wage requirements.

The Chancellor George Osborne announced in last week’s Summer Budget that the new compulsory National Living Wage will be paid for by decreases in corporation tax.

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Mr Robinson, who owns and manages a farm in Gloucestershire, did however herald the formation of a new all-parliamentary group which, he said, will give rural businesses a platform to make their concerns known.

Speaking at the Great Yorkshire Show, where he called on MPs to “get their wellies on” and get out into rural areas, he said: “This week there is the launching of the all-party parliamentary group on rural business chaired by local MP Julian Sturdy (York Outer) and with Sue Hayman, MP for Workington, the vice-chair. What that will do will get politicians focused on rural business and that will be a good platform.

“We at the CLA have been really rural focused in the run up to the election, and post election we have done 200 fact cards to tell each rural MP what the value of their constituency is to the rural economy.

“Nationally, the rural economy is worth £210bn and employs 3million people and accounts for a quarter of all businesses. Farming is bigger than the aerospace and car industry combined. Part of my job is that no MP, lord or civil servant forgets that.

“We want them all to get out into the countryside and learn the value of the rural economy.”

On his concerns over the impact of the recent Budget, Mr Robinson said: “The national living wage... it is being funded by cuts in corporation tax. (But) 90 per cent of farming and rural business is private, it’s done on a partner or sole trader basis so the cut in corporation tax will give them no relief; the difference will come straight off their bottom line. We all support the concept of a national living wage but it’s going to have an effect on business.

“I think rural business will have to take a hit. Clearly, if you are right on a knife-edge now, you could go out of business.”

He said if rural businesses suffer, the environment suffers: “We undervalue the environment - something you can’t put a price on. You can’t be green unless you are in the black. Active (environmental) management takes time, costs money and isn’t easy to do.”

He said new ways of generating public funds to meet the country’s environmental aspirations were needed, despite EU schemes which pay farmers for environmental land management.

“The new government should be looking at a system of a biodiversity offsetting,” he said.

The CLA sees “offsetting” as being primarily a commercial matter with landowners deciding if they want their land to be used for conservation purposes, for an agreed period if the price is right.

Mr Robinson said he was looking forward to the CLA Game Fair - the CLA’s flagship outdoors event to celebrate the countryside - returning to Harewood House, Leeds on July 31-August 2.

“The Game Fair is going to be a triumph at Harewood. Three days of the greatest countryside show - can I say that at the Great Yorkshire Show? It’s going to be a wonderful thing. The first time back in Yorkshire since 2003 so I’m very pleased with that and I hope the whole of the North is going to turn up in great numbers. It’s really nice to be back there.”