CEO's Blog 27th May 2010

We are living in interesting political times.  We have the freshness (and perhaps hope?) of a new form of coalition government, but one that is clouded by the threat of the largest public expenditure cuts in a lifetime.

Reading the Tory/Lib Dem coalition's "Programme for Government", there is much to lift the heart from an agricultural point of view.  To pick some of the editted highlights:

• a new "one in, one out rule" where no regulation is brought in without another being cut by a larger amount
• an end to 'gold-plating' of EU regulation
• introduction of a supermarket ombudsman
• a scheme to reduce fuel tax in remote rural areas
• introduction of 'honesty in labelling'
• support for farmers to convert buildings into affordable housing

It all sounds like something we might write on a wish list (indeed, much of it is a mirror image of our own mock Programme for Government published weeks before the election).  However, arguably the whole coalition programme is overshadowed by a monster footnote, in bold on the backpage which reads:  "The deficit reduction programme takes precedence over any of the other measures in this agreement".

That chimes with the note rumoured to have been left on the Treasury desk by the departing Finance Minister Liam Byrne for his successor, Lib Dem David Laws.  It is tradition that the departing Minister leaves some private advice to the new Ministerial arrival.  Mr Byrne's note apparently just read "Dear chief secretary, I'm afraid to tell you there's no money left."

Scotland will be shielded initially from the savage cuts under a deal apparently brokered in recognition that Scottish spending this year has already been committed.  However, it is a stay of execution and we'll probably have double the pain in year two.

Some of the policy promises above (not least on fuel tax and a supermarket ombudsman) are hugely important and relevant north of the border.  Many - not least on regulation - cover matters reserved to Scotland.  However, budgets cuts in the funding allocated to Scotland mean our whole operating environment will be influenced, whether policies are born in Holyrood or Westminster.

Fortunately, the most significant injection of funds into Scottish agriculture - through the CAP - are unaffected.  But only for now.  The economic situation is arguably bleaker in mainland Europe than it is here, so enjoy the respite, because come 2013 and the negotiation of the new EU budget, agriculture will be very much in the spotlight.  Our job in highlighting the benefits of agricultural spending will never have been more important.