Sorry Sinkrate, it is true and it has nothing to do with VFR. Since I have got the time I've reproduced Rule 29 here
Minimum height
29 Without prejudice to the provisions of rule 5, in order to comply with the Instrument
Flight Rules an aircraft shall not fly at a height of less than 1000 feet above the highest
obstacle within a distance of 5 nautical miles of the aircraft unless:
(a) it is necessary for the aircraft to do so in order to take off or land;
(b) the aircraft is flying on a route notified for the purposes of this rule;
(c) the aircraft has been otherwise authorised by the competent authority; or
(d) the aircraft is flying at an altitude not exceeding 3000 feet above mean sea level
and remains clear of cloud and in sight of the surface.