Budget bombshell is ‘disaster for business’

Budget bombshell is ‘disaster for business’ and tax raid ‘will deliver fatal blow’ that risks further food price hikes

• Ranjit Singh Boparan says the Budget’s raid on businesses will drive food inflation and cost his own portfolio of businesses “tens of millions”
• He also raises alarm over tax raid on farms over £1m
• The 2 Sisters President says many farmers will abandon food production and will cause supply issues
• Beleaguered farming sector already faced severe cost challenges in recent years

Food industry entrepreneur Ranjit Singh Boparan says Rachel Reeves’ Budget served up an unexpected ‘double whammy’ bombshell for businesses that risks driving food inflation further and delivers a potential “final fatal blow” for the beleaguered farming sector in the UK.

Mr Boparan relies on a network of hundreds of independent, family-owned farms for the supply of poultry into the UK retail and food service sector and the Budget’s inheritance tax raid on farms over £1m risk that supply being severely compromised. Under plans announced in the Budget, inheritance tax will be charged at 20 per cent on farms worth more than £1m.

Mr Boparan, President of 2 Sisters Food Group, explained that not only will this move force many farms out of business, restrict supply and increase costs, it does not align with the Labour government’s aspiration to adopt policies to ensure food security in the UK: in other words, to ensure the UK grows and supplies most of the food it eats.

He said: “This Budget was a disaster for business and will deliver a final fatal blow to the thousands of small family-owned farms we in the food manufacturing sector rely upon day in, day out. They provide security of supply. This move will create food inflation and food insecurity.  It will mean less people investing in food production in the UK.

“Farmers have been hit with massive inflationary rise in costs in recent years like feed, energy, labour, then we had a couple of particularly challenging years with high levels of Avian Influenza and the war in Ukraine. This instability in the supply chain means we’re always vulnerable to geo-political events.”

His public comments come as confidence in the UK poultry sector’s farming base remains worryingly low. NFU survey data from earlier this year suggested 15% of chicken meat producers were either unlikely or unsure if they would still be producing poultry “beyond November 2025.”

Mr Boparan added: “All this has pushed British poultry to breaking point, and I see this latest inheritance tax rise as the issue that will push thousands of farms over the edge, it really is quite unbelievable given what they’ve had to endure. This makes a mockery of the government claiming to want a self-sustaining farming sector that champions British-made food. This tax rise does the exact opposite of that – it kills the sector, stifles supply and ultimately prices will rise.”

On the Budget’s overall impact on private, family-run companies, his own modelling suggests it could cost his portfolio of businesses – ranging from food production to high street restaurant brands - “many tens of millions” – which ultimately will be passed onto the customer.

He added: “The retailer sector has already quoted it will cost £1bn and in truth our sector won't be much behind that. £2bn on-cost is going to cause food inflation, all the while we've been spending all our time trying to bring inflation down.

“This Budget has done very little to encourage business owners to invest and build. Some businesses will find these changes a burden and it makes it more difficult to keep running smoothly and maintain value. Privately-owned businesses are the backbone of the UK economy and take a different view on long-term investment. All this budget package does is reduce confidence and increases the chances of closures or selling to Private Equity for example, which invariably generates less tax.”

The tax bombshell has also triggered a backlash from business, farming and rural communities. Last week, Tom Bradshaw, chief executive of the National Farmers’ Union (NFU), said around “75 per cent of the total farmed area” would be subject to the extended death tax.