Rachel Reeves ripped apart for mind-boggling tax rise that could rachet up food prices | Politics | News
Nine of Britain’s biggest supermarkets have warned Rachel Reeves not to raise food prices by increasing business rates at major sites. Top names including Asda, Lidl, Tesco and Waitrose have written to the Chancellor to raise the alarm about the dangers of food inflation.
They warn that households will “feel the impact” if supermarkets are forced to pay higher taxes, warning that “high food inflation is likely to continue into 2026.” Bosses write: “This is not something we would like to see any measures extended in the Budget. Major retail premises account for a small fraction of all shops but account for a third of retail’s total business rate bill, meaning another significant increase could push food inflation even higher.”
The government plans to introduce higher business rates for properties with a rateable value over £500,000; This horrified the British Retail Consortium.
Chief Executive Helen Dickinson said: “Supermarkets are doing everything possible to keep food prices affordable, but it is an uphill battle with additional costs topping £7bn in 2025 alone. From higher National Insurance contributions to new packaging duties, the financial pressure on the sector is huge.
“Major retail stores employ almost a million people in Britain and already contribute to a third of all retail business rates, despite being a tiny share of all shops. This letter calls on the Chancellor to exempt shops from the new business rates surcharge imposed on all large commercial premises. This will not only help fight food inflation, but also boost employment and investment across the country.” will support it.”
The letter’s signatories, which include leading figures from Aldi, Iceland, Marks & Spencer and Sainsbury’s, warn: “The IMF predicts the UK will have the highest inflation in the G7 in 2025 and 2026. This is important for millions of ordinary people struggling with the high cost of living and will continue to be important until food inflation is reined in.”
They claim that six in 10 UK households have seen a drop in weekly disposable income and warn their “ability to cover additional costs has diminished”.
Shadow Chancellor Sir Mel Stride said: “This letter from Britain’s biggest supermarkets is yet another warning that Rachel Reeves’ tax rises are fueling inflation and driving up the cost of living for families. “With even supermarkets struggling to keep prices down for millions saying the Chancellor’s decisions are driving up costs, it’s clear Labor is losing control.
“Inflation is still nearly double the Bank of England’s target, food prices remain stubbornly high and Rachel Reeves’ answer is to raise taxes again. Business rates for retailers increased under Labor; a Conservative government could remove thousands of shops from business rates altogether.”
A Treasury spokesman said: “Tackling food inflation is a priority, so we’re boosting incomes by increasing the National Living Wage, reducing business rates for butchers, bakers and other shops, and sticking to our fiscal rules to reduce inflation.”
The government argues its deal with the EU will help make food cheaper and says food inflation fell to 4.5% in September from 5.1% in August, the first decline since March.
