
Fine food firms have reacted in despair to an Autumn Budget they warned could cost jobs and close premises across the sector.
Chancellor of the Exchequer Rachel Reeves on 30th October announced a series of measures set to drive up costs for independent producers and retailers (see box-out below right).
According to analysis by accountants Deloitte, an employee earning £20,000 per year will cost businesses 50% more in National Insurance contributions alone from April next year.
Meanwhile many firms could see their expenditure on Business Rates more than double, and farmers have protested in Whitehall over changes to Inheritance Tax they said could force many to sell up.
British Independent Retailers Association chief executive Andrew Goodacre decried “without doubt the worst Budget” he had ever seen for the sector.
A “perfect storm of crippling cost increases” could “force many shop owners to make heart-breaking decisions about their businesses’ futures”, he added.
“I can only assume that the Government is happy for working people to shop online and buy cheap imports. This government has shown complete disregard for the local businesses that create jobs and maintain vibrant communities.”
Farm Retail Association chair Emma Mosey said the Budget “sounded a death knell for small-scale food production in the UK”.
She added: “This could lead to job cuts, reduced investment and higher prices for consumers. The rapid increase in costs is making it increasingly difficult to remain competitive.
“Many farm retail businesses are family-run by hard working people… these fears cannot be overplayed.”
The Budget came hot on the heels of ministerial meetings with business leaders over the government’s Make Work Pay proposals, which would see minimum wage tapering removed for adults and introduce the right to sick pay and parental leave from day one.
Federation of Small Businesses policy chair Tina McKenzie said the government’s stance on employer responsibilities would hit many companies hard.
“We’ve been very clear in our warning of the difficulty SMEs will be confronted with in meeting all of these changes at once – and the potential impact on jobs, wages and prices,” she said.
However, McKenzie added that increasing the employment allowance to give companies £10,500 off their National Insurance Bill rather than £5,000, and making all firms eligible for this, was “very welcome”.
Regardless of specific policies, McKenzie insisted the “true test” of the Budget would be whether small businesses were able to grow and “end the economic stagnation the UK has been stuck in”.
This article first appeared in the December 2024 edition of Fine Food Digest