UK Business Leaders Warn of Risks to Food Production and Family Farms Amid New Tax Changes

Senior business figures, including Nigel Murray, Managing Director of Booths supermarket, have raised alarms over recent tax changes that could undermine domestic food production in the UK. Murray, whose supermarket sources 60% of its products from British farmers, warned that while the effects may not be immediate, the changes could erode incentives for local food production over time, leading to higher supermarket prices and a reduced level of self-sufficiency.

Murray expressed concern that an increased reliance on imports could result in challenges related to environmental impact, animal welfare standards, and escalating costs. “Over time, there is a real risk that domestic food production could be eroded,” he stated.

The National Farmers Union (NFU) president, Tom Bradshaw, also voiced strong criticism of the tax reforms, suggesting that they could force family farms to sell off assets, thereby threatening the future of farming in the UK. Bradshaw warned that these changes would hurt long-term food security, stating, “Every penny saved by the Chancellor comes directly from the next generation having to break up their family farm.”

The parent company of British Sugar, ABF, echoed these concerns. CEO George Weston described the tax changes as a setback for the farming community and urged policymakers to prioritize food security and domestic agricultural production. The NFU has called for talks with Labour Party leaders, including Sir Keir Starmer and Rachel Reeves, to address farmers’ concerns and seek solutions to mitigate the tax’s impact on farming operations.

Recent data underscores the vulnerability of UK cereal production to extreme weather events, highlighting the importance of agricultural resilience. Historically, agricultural land enjoyed inheritance tax exemptions, which were designed to support the generational transfer of family farms. However, new tax rules, set to take effect in April 2026, will impose a 20% tax on farming assets valued over £1 million, potentially forcing asset-rich, cash-poor farms to sell parts of their estates to meet tax liabilities.

While the Treasury maintains that the tax will impact only a small minority of farms, the NFU estimates that it could affect up to 75% of British food production. The government argues that the policy strikes a balance between supporting family farms and funding essential public services.

In addition to these tax changes, Labour’s recent budget closed a vehicle tax loophole for pickup trucks, impacting agricultural workers who rely on vehicles like the Ford Ranger. Farmers, such as Jon Watt in Suffolk, have expressed concerns about the rising cost of agricultural vehicles and have begun adjusting their investment plans in response to the growing uncertainty surrounding agricultural policies.

The policy changes have sparked a broader national debate about food security, with some industry leaders warning that the tax could lead to widespread business closures and job losses, particularly among Britain’s estimated 140,000 family-run farms. Family Business UK chairman Sir James Wates condemned the move as “economic illiteracy,” while the Treasury argues that only a small proportion of businesses will be affected.