In a shake-up that has sent tremors through Scotland’s farming and crofting communities, the first Labour Budget in 14 years is drawing sharp criticism for its potential impact on agricultural livelihoods.
Jonnie Hall, NFU Scotland’s Director of Policy, has voiced serious concerns over changes to Inheritance Tax and Agricultural Property Relief (APR), saying these alterations could be a heavy blow for family-run farms and crofts across Scotland.
In his latest blog, Hall argues that the Budget demonstrates “a sheer lack of understanding of how agriculture works throughout the UK” and warns of mounting financial and mental pressures on farming businesses unless the UK Government rethinks its approach.
On the ground, responses to the budget’s farm support decisions have been mixed, with many calling the revised funding model confusing and unpredictable.
According to Hall, the budget lacks the clarity that farmers need, and, upon first glance, seemed like bad news when Treasury details emerged post-Budget speech.
However, closer examination has revealed that while farm support for Scotland is being folded into the wider block grant, it could allow a measure of flexibility for Scottish funding choices.
With the ring-fenced agricultural funding now cut, the UK Government confirmed that, starting from 2025-26, devolved governments will receive block grants instead of designated funds for agriculture and fisheries.
This decision, in theory, frees up the Scottish Government to allocate funds according to its own priorities, but it also means that agriculture is now competing with other critical areas like health and education for funding.
On a broader scale, the Scottish Government is set to receive an additional £3.4 billion in its block grant, making this allocation Scotland’s largest since devolution, potentially reaching £47.7 billion by 2025-26.
Hall notes that this increase offers the Scottish Government “headroom” to raise the Agricultural and Rural Economy (ARE) budget, adding that it’s now crucial for Scotland to use these funds to support agriculture as the sector faces ongoing challenges.
As the focus turns to Holyrood, Scottish farmers and crofters will be watching the Scottish Government’s next moves closely, with the Scottish Budget set for 4 December.
With heightened urgency, NFU Scotland will seek meetings with Cabinet Secretaries and Ministers, aiming to ensure that agricultural priorities are kept firmly on the agenda.
Hall remains clear: the Scottish Government can no longer delay returning the £46 million of uncommitted funds from past budgets, which he argues should now support high-quality food production, climate action, and vibrant rural communities.
As Hall points out, “The responsibility, decision-making, and additional budget now solely lie with them,” and it’s a call to action he’s urging Scotland’s leaders not to ignore.