Autumn Budget: 'Relief' as forestry escapes 'relatively unscathed'

In the first Labour Budget since 2010 – and the first ever delivered by a woman – Chancellor Rachel Reeves promised to “invest, invest, invest” as she made sweeping changes to national insurance contributions,  capital gains tax and inheritance tax. 

As for forestry-related commitments, Ms Reeves pledged to invest "£400 million in capital across 2024-25 and 2025-26 for tree planting and peatland restoration" while Defra's budget was raised slightly in real terms; however, there was some dismay that the department was not "given the boost it needed". The £400m is not new money and instead will come from the existing Nature for Climate Fund. 

• READ MORE: No fresh money set aside for woodland creation in England

Christopher Williams, chief executive officer of the Royal Forestry Society (RFS), said: "If we are to address our needs for home-grown timber, fight climate change and address the loss of biodiversity and natural capital, which underpins our economy, we need to invest more in forestry. 

"Defra suffered badly during the austerity years, and could really have done with more resources to enable it to address these challenges going forwards. 

"Defra’s budget overall has not been significantly affected by the Autumn budget announcement, so whilst it did not get the boost it needed, it has at least not suffered as much as many had feared." 

Farming was arguably the big loser in Wednesday's Budget as Ms Reeves announced a reform on inheritance taxes applied to farms. However, it has since emerged that BPR changes will also hit commercial woodlands.  

The Chancellor said from April 2026, the first £1 million of combined business and agricultural assets will continue to attract no inheritance tax.

But for assets over £1 million, inheritance tax will apply with 50 per cent relief, at an effective rate of 20 per cent. This move - as well as a lack of new funding for that side of the agricultural sector - has been widely criticised. 

Rachel Reeves' budget did not provide any real cash boost for forestry in England

Similar changes have also been made to business property relief. At present, the entire value of commercial woodland, including both the land and the trees, attracts BPR of 100 per cent once it has been owned for two years. Initially, it was unclear whether or not the alterations to BPR - due to come into effect in April 2026 - would affect commercial woodlands, but the Treasury has since confirmed to Forestry Journal that they will apply. 

As for funding on a wider UK scale, forestry figures pointed to "record settlements" for the devolved administrations. 

Stuart Goodall, chief executive of trade body Confor, said: “Depending on how public funding is allocated, there is - on paper at least - likely to be sufficient funding available to follow through on the aspiration to increase the level of woodland creation in England. Confor will be seeking more detailed information on this in the coming weeks.

“It is also worth noting the impact of the Budget for forestry in devolved administrations. The Chancellor has claimed that this year’s is 'the largest real term funding settlement since devolution' and, following the savage cut to the Scottish planting budget in 2024/25, Confor will be lobbying hard to see those funds appropriately allocated for 2025/26 and 2026/27." 

Stuart Goodall suggested record settlements for the devolved administrations could be used to restore forestry budgets

Ms Reeves told the Commons: “This is not the first time that it has fallen to the Labour Party to rebuild Britain.

“In 1945, it was the Labour party that rebuilt our country out of the rubble of the Second World War. In 1964, it was the Labour Party that rebuilt Britain with the white heat of technology. And in 1997, it was the Labour Party that rebuilt our schools and our hospitals.

“Today, it falls to this Labour Party, this Labour Government to rebuild Britain once again.”