A total of 57 businesses spanning the food supply chain, including all major UK supermarkets, have raised concerns in a newly issued letter.
Contributing £162 billion to the economy and supporting over 4.5 million jobs, the sector warns the Treasury that altering IHT rules could jeopardise supply chains.
Spearheaded by the NFU, the letter expresses alarm over the government’s proposal to abolish agricultural property relief (APR) and business property relief (BPR).
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The alliance, which includes leading food producers such as 2 Sisters, Pilgrims and Cranswick, cautions that scrapping these reliefs could undermine the long-term resilience of the UK’s food system.
The letter further outlines how the proposed changes could create obstacles to growth, productivity and efforts to address diet-related health concerns.
NFU president Tom Bradshaw warned that Labour’s fiscal policy risks ‘destabilising an industry that is vital to feeding the nation’.
Bradshaw questioned: “How loud does the chorus of concern around the policy have to be for Treasury to listen and take action?”
“Scrapping critical inheritance tax reliefs not only affects family-run farms, but it stands to have far-reaching consequences for the whole industry, from food processors to supermarket retailers.
“When one link in a supply chain, the link that is producing the raw materials, has a crisis of confidence and has already all but stopped investment, it has an impact on the whole of the industry; an impact that will eventually be felt on supermarket shelves.”
Retail giants including Tesco, Waitrose, Marks & Spencer, Sainsbury’s, Asda and Morrisons have all publicly opposed the IHT changes in recent weeks, calling for a policy reversal.
Last Friday, Iceland’s managing director, Richard Walker – a Labour supporter – criticised the chancellor’s decision to target family farms.
The NFU has warned that 75% of farms could be affected, with other industry estimates suggesting 2500 farmers per year will be impacted – five times the number projected by official forecasts.
Bradshaw added: “With large numbers of Britain’s biggest manufacturing sector – food and drink – against this policy, it is time for the chancellor to heed our calls to meet to discuss options and find a way forward out of this current mess.”
Signatories of the letter also include the UK’s major farming unions, leading dairy processors such as First Milk and Dale Farm, and various meat and egg businesses.