Tesco has warned “the UK’s future food security is at stake” and called for a “pause” in the rollout of the government’s controversial reforms to Inheritance Tax for farming businesses.
The retailer became the latest supermarket to add its voice to calls for a u-turn on the divisive policy today, with Lidl, Co-op and Aldi also making similar demands.
A blog published on the Tesco website by its chief commercial officer Ashwin Prasad said the retailer “fully” understood the concerns of farmers over changes to agriculture and business property reliefs. The changes were announced by Chancellor Rachel Reeves in her budget on 30 October, and include an end to 100% relief on property worth more than £1m.
“It’s why we’ll be supporting the NFU’s calls for a pause in the implementation of the policy, while a full consultation is carried out,” Prasad said.
The consultation “must be followed by the setting of a long-term vision for UK agriculture which gives farmers clarity on the role they can play in the UK’s wider transition to net zero”, Prasad added. “Farmers desperately need more certainty.”
Tesco flags farming challenges
The sector needed government to “create the right policy conditions” for farmers to be able to invest in, and benefit from the transition, he urged, echoing comments he made at the Oxford Farming Conference earlier this month.
Measures announced by environment secretary Steve Reed at the conference, such as a commitment for more food to be sold to the public sector, and wider promises to work with the food industry on a 25-year farming roadmap, were described as “a step in the right direction”.
However, Prasad also warned of the change and challenge UK farmers have faced in the past few years, as everything “from unprecedented flooding and unpredictable weather, to continued policy change and uncertainty”, had made “investing in their farms more difficult”.
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“This is not just a debate about individual policies – the UK’s future food security is at stake,” he warned. Some 74% of farmers surveyed by Tesco were “concerned about the impact of climate change on their farms and two-thirds (67%) are already seeing the effects”, Prasad said.
Action to ensure farms remained sustainable, both economically and environmentally, was therefore “critical to help future proof farmers’ businesses”, he stressed. “It’s also essential in protecting the food security of the nation and baskets of our customers so they can continue to get the great quality food they want, at a price they can afford.”
Supermarkets echo support
The retailer’s intervention in the campaign to abolish the so-called ‘Family Farm Tax’ follows similar comments from Asda, which has also called for a pause in the rollout of the new IHT policy.
Lidl has today also announced its support for a pause in the rollout of the policy.
“With two thirds of our products sourced from British suppliers, including 100% of our everyday fresh beef, pork, poultry, milk, butter, cream and eggs, it’s important that we help British farmers, food producers and suppliers thrive now and in the future,” the retailer said in a statement.
“Providing security and long-term investment for British agriculture is key to helping ensure that farmers can continue to produce affordable and increasingly sustainable food for generations to come,” Lidl added.
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“We are concerned that the recent changes to the IHT regime will impact farmer and grower confidence and hold back the investment needed to build a resilient, productive and sustainable British food system,” it said. “We, therefore, support the call by the farming community to pause the implementation of those changes and to consult with industry to achieve a mutually beneficial outcome. We will be raising our concerns with government at any opportunity we get.”
Its comments were echoed by Co-op, which, in a letter sent to members of its Co-op Dairy Group today, said it had “directly contacted relevant government departments to communicate our hope that they will look again at the impact of the IHT/APR changes”.
Aldi said: “We all need a farming sector that can confidently invest in its future and continue to produce high-quality British food. That’s why we are supporting the farming community’s calls for the government to pause the implementation of its proposed changes to inheritance tax until a further period of consultation has taken place.”
Marks & Spencer also confirmed its support for a pause on Wednesday afternoon.
Alex Freudmann, MD of M&S Food, said the retailer’s farmer suppliers were “telling us us they are concerned about the impact of the IHT changes and government policy on their ability to make long term decisions about the future of their farms and on their confidence that they can pass on a viable business to the next generation”.
And on Thursday morning, Waitrose executive director James Bailey said: “Agriculture is the backbone of our food system and of rural Britain and we are hearing from our farmers that inheritance tax is limiting their ability to plan ahead. It is important that the government considers the impact of these changes and listens to farmers’ concerns.”
His comments were echoed by Ocado, which confirmed it also supported a pause.
Meanwhile, Morrisons, which secured an injunction against protesting farmers at its distribution centres following a blockade on 10 January, this week stressed to The Grocer that “non-disruptive” protestors at its stores would be “welcomed with tea and a bacon roll” – while it continued to lobby government to change course.
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