Chancellor Rachel Reeves has delivered the much-anticipated 2025 Autumn Budget, reporting that the growth outlook for this year has risen from the 1% forecast in March to 1.5%.
Reeves stated that she would “more than double” headroom from £9.9 billion to £21.7 billion with the intention of keeping within her fiscal rule to “balance the budget”. However, in 2026, the economy is now expected to expand by 1.4%, below a previous forecast in March of 1.9%.
Responding to pressure from the farming lobby, the Chancellor announced that farmers who are married, or have deceased spouses, will be allowed to transfer their inheritance tax allowance to one another if one of them dies having not used their allowance.
The Association of Independent Meat Suppliers
Tony Goodger, head of communications at the Association of Independent Meat Suppliers (AIMS) highlighted point 2.11 within the Budget, which stated that food price inflation was “still too high at 4.9%”. It said that households were feeling the impact in their weekly shop, with Government set to “act decisively” to negotiate an agri-food deal with the EU, aiming to make it easier for the UK to trade with the EU.
The point went on to say that food businesses will “save time and up to £200” per shipment when trading fresh food, aiming to “reduce pressure” on prices. It stated that the Government also announced a Food Inflation Gateway to assess and monitor regulation, which “could add to food prices”, commenting that this will enable the Government to “coordinate and sequence changes” and give food businesses a single line of sight so they can keep prices as low as possible.
Goodger commented: “We urge the Government to work without delay on delivering the agri-food deal with the EU and also await with interest what impact the Food Inflation Gateway announced last week will make to our industry.
“We hope that this announcement won’t in any way add to the administrative and regulatory burden along the supply chain, especially at processing sites.”
AIMS noted that the Food Standards Agency (FSA) will be working to introduce a national level regulation, aiming to reduce the administrative burden on the largest food retailers, and welcomed the announcement that tariff-free imports will be maintained until 31st December 2026 to “avoid unnecessary costs” for businesses.
Goodger stated: “AIMS welcomes the announcement of the tariff suspension extension, and hopes that this will help drive further NPD based around high quality food ingredients that are not readily available from UK producers.”
British Meat Processors Association
A spokesperson for the British Meat Processors Association (BMPA), commented: “There are two components to the budget that may have an impact on our members and the wider food supply chain. The increase in minimum wage will increase the cost of production but this will depend heavily on the proportion of the workforce who are on minimum wage in any one factory and how that affects wage compression at different skills and salary levels. Many jobs in the meat processing industry already pay well above this level due to the difficulty recruiting.
“The other measure that could have an impact and potentially flow through to food price inflation is the change to national insurance on pension contributions. However this is still some years away from being implemented and much can happen between now and 2029. We will be canvassing our members over the coming weeks to gauge reactions to the budget.”
National Farmers’ Union
Referring to inheritance tax, NFU president Tom Bradshaw said: “It’s good to see the Government accepts its original proposals were flawed. But this change goes nowhere near far enough to remove the devastating impact of the policy on farming communities.
“It’s only right that agricultural allowances can be transferred between spouses and it’s something we’ve been calling for, but it doesn’t go anywhere near far enough in protecting the working people of the countryside. It does nothing to alleviate the burden it puts on the elderly and vulnerable.
“It is also a huge smack in the face to the Labour MPs who have been working so hard to find a way through this for their local farmers. To them, we say thank you.
“The Chancellor said she wanted to ‘back working people not make them poorer’ and to ‘increase investment not cut it’. To do that, Government must look again at the multiple solutions that have been put forward by industry and tax experts.”
“We believe farming may benefit from the announcements on apprenticeships.”
Tom Bradshaw, NFU
Bradshaw continued: “Several other announcements in the Budget will hit farming and growing businesses hard. The increase in the National Living Wage, which will have risen 12% in two years, puts further cost pressures on agricultural and horticulture businesses and further inflationary pressures on our food system.
“However, we believe farming may benefit from the announcements on apprenticeships and it could help bring the next generation into our food and farming sector.
“Public support over the past year has been incredible. We will need this support to continue from all sides to create the change needed to protect those people caught up in this unjust, unfair policy. The fight continues; we cannot give up and we will work with the wider industry, supply chain and MPs on next steps.”
British Poultry Council
British Poultry Council (BPC) chief executive Richard Griffiths said: “Today the Chancellor spoke about choices. For poultry meat producers feeding the nation, those choices are getting harder: planning is slower, input costs keep rising, and supply chain pressures continue to intensify. These pressures restrict the investment and growth needed to keep food affordable.
“We welcome the Chancellor’s emphasis on innovation, but a truly productive economy also depends on a stable production base: that requires recognising the cumulative pressures facing food producers and ensuring Government’s choices don’t deepen them.”
The Food and Drink Federation
Karen Betts, chief executive of The Food and Drink Federation (FDF), said: “We recognise the Chancellor had difficult decisions to make given the challenging fiscal situation. But we would have liked to see more in this budget on growth. Investment in productivity and growth in our sector is the best medium-term protection against the UK’s persistently high rates of food inflation, and it preserves jobs and boosts skills. While it’s positive to see the Government engaging on inflation, there’s much more Government and industry can do together now to address this.
“This includes ensuring the UK’s largest manufacturing sector receives an adequate share of Government R&D funding, maintaining stable regulation, and not overlooking food and drink in support for energy intensive industries.
“Where regulation needs to change, Government must ensure meaningful consultation with business – as there was on the Soft Drinks Industry Levy, but which we need to see on the Nutrient Profile Model too. The right engagement between our industry and Government will create the conditions for sustained growth, investment, and productivity gains.”
General overview
The Chancellor confirmed that the National Living Wage will increase to £12.71 per hour for people aged 21 and over, and the National Minimum Wage will increase to £10.85 per hour for those aged 19-20. Under 18s will see wages rise up to £8, along with the apprenticeship rate.
From April 2029, Government will also charge employee and employer National Insurance on any pension contributions made via salary sacrifice above £2,000 a year and halve capital gains tax relief for bosses selling their businesses to Employee Ownership Trusts from 100% to 50%, aiming to retain a “strong incentive” for employee ownership while ensuring business owners pay their fair share.
Government will also make over £1.5 billion available across the spending review period into the Youth Guarantee and the Growth and Skills Levy, with the cost of apprenticeships for under 25-year-olds to be made free for small and medium-sized enterprises (SMEs).
