Autumn Budget 2025: What’s in it for food, farming and agritculture?

On 26 November, Chancellor of the Exchequer Rachel Reeves delivered her second budget statement to Parliament. She used her statement to highlight the importance of protecting working people from the government’s tax raising measures and reiterated her three core objectives: reducing NHS waiting lists, cutting the cost of living, and curbing government debt.

The tax-raising measures outlined in the budget, which are required to meet the government’s fiscal rule of having a balanced budget for day-to-day spending by 2029-30, are projected to raise £0.7 billion in 2026-27, rising to £26 billion in 2029-30. These measures more than offset the additional packages of spending outlined in the Chancellor’s statement and reflect weaker than anticipated economic growth and higher borrowing costs. The Chancellor has opted to increase a range of existing taxes and introduce new ones, rather than pursue a smaller number of larger measures borne by the general population (such as increasing the basic rate of income tax or the standard rate of VAT).

Food, Farming & Agriculture

The budget headline for the food and drink sector is the government’s plan for a tougher sugar tax, which had been pre-announced by the health secretary the previous day. The measures will expand the scope of the soft drinks industry levy to milk-based and milk-alternative products and lower the threshold from 5g per 100ml to 4.5g, effective from 1 January 2028. The Chancellor also announced plans to tackle food inflation and reduce the regulatory burden on the largest food retailers through the new Food Inflation Gateway and its agri-food negotiations with the EU. The Food Standards Agency will work to introduce a national level regulation to streamline food standards and hygiene regulation to reduce the administrative burden on supermarkets.

The agricultural community will be disappointed that, despite months of speculation and Westminster protests, the Chancellor did not reverse her reforms to agricultural property relief. Reeves did though confirm that the £1 million allowance for the 100% rate of agricultural property relief will be transferable between spouses and civil partners.

If you are interested in discussing these matters in more detail, please contact Thea Southwell Reeves at thea@gkstrategy.com

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