Peterborough farmers warn of rising cost of food in shops as Budget tax rises begin to bite

A leading farmer in Peterborough has warned that households are likely to see a rise in the cost of food as producers struggle to cope with a growth in costs after the Budget.

Food producers say a combination of measures announced by the Chancellor of the Exchequer Rachel Reeves in her Budget on October 30 will drive up the cost of food and endanger the future of food production in the UK.

William Burgess, chairman of the family-owned Burgess Farms in Yaxley, which employs about 500 people, said: “Measures in the Budget will fuel food inflation and will also threaten the survival of food producers.

He said: “The increase in employers’ National Insurance contributions and the increase in the National Living Wage will add about £1 million to our wage bill.

"And that extra 10 per cent cost will definitely be passed on. It is not a cost that we can cover.”

Mr Burgess added: “The new Employments Rights Bill will also mean added costs. The choice will be for farmers to pass on the costs or go bust.”

It is also feared the future of many farms will be threatened by the Budget changes to agricultural property relief (APR), which currently allow some assets to be passed on to family members free of inheritance tax,

From next April, the current 100 per cent rate of relief will continue for the first £1 million of combined agricultural and business property but will fall to 50 per cent for farms valued above £1 million.

Mr Burgess said: “I think this is a mistake. The majority of farms are valued at well over £1 million.

"We are likely to see many family farms end up being broken up and sold.”

Mr Burgess said he was likely to join a national demonstration of hundreds of farmers set to take place at Westminster on November 19 to protest at the growing number of burdens faced by food producers.

Also among the demonstrators will be Peterborough entrepreneur and former retailer Mike Greene who said: “I’ve never been on a rally or a protest before, and I’m not a farmer, but I will be attending and supporting this protest.

He said: “This isn’t a matter of left or right but about what is right or wrong and this is just plain wrong- it’s naive and short-term.

"It is the final straw for me. Farming is a risky business. For most, there are two or three average years for every good year. We cannot afford to lose our farmers.”

He said: “And food poverty is becoming a big issue for this country"

Tom Bradshaw, president of the National Farmers Federation, said that after decades of lower margins, record inflation, extreme weather and increased production costs, many farmers and growers were at ‘breaking point.’

Peterborough MP Andrew Pakes said: “There were no easy choices for the Chancellor in the Budget – it is an increase in tax for some very large farms. It was also going to be unpopular but we are investing in the country and investing in sustainable food production.”