Tory strength and UKIP weakness should bring better referendum outcome for agriculture
Date of Article
May 11 2015

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8 May 2015, The Conservative victory in the General Election means a referendum on UK membership of the European Union is a certainty, but the fatal failure of UKIP to gain ground makes it less likely that the UK will eventually exit the economic community, believes Simon Pallett, chairman of national property consultancy Carter Jonas.

The emphasis will now be on negotiating a better deal for the UK if that's possible if UKIP had been involved in supporting a minority Tory Government there would have been pressure for a vote this year rather than in 2017 with more likelihood of a hasty exit because of the short negotiating time for a new deal; commented Mr Pallett.

Farmers should vote to stay in Europe when the referendum does occur if they want continued support from the CAP. It is also more likely to reinforce the growing manufacturing strength of the UK which then strengthens employment opportunities and consumers ability to afford better quality home produced food.

There is a fear that taxation changes could bring the possible removal or reduction in Agricultural Property Relief for Inheritance Tax purposes but maybe without a coalition partner to please and Labour seriously damaged below the waterline there will be less pressure in the early years of this Government for wholesale taxation reform and more time for considered planning.

Stable interest rates should encourage investment and make it easier to finance new machinery or land purchases to make a holding more profitable, especially as the Conservatives have a more benevolent attitude towards Corporation Tax rates for the limited companies running many farming ventures.

The Pound is more likely to remain stable whereas a weakening of the Pound would have helped export prices and improved profitability as well as payment rates under CAP. However, it's probably better for long-term planning to have currency and interest rate stability and I hope the Government is not so distracted by the EU referendum that it takes its eye off our overall economic performance.