Trade bodies representing bakery businesses have largely reacted with concern over the Autumn budget.
Just one new policy announced by Chancellor John Healey in his inaugural budget on 28 October was welcomed by organisations: the increase in threshold for Small Business Rates Relief (SBRR) from £12k to £18k.
Craft Bakers Association chief executive Karen Dear described it as positive step that provides some much-needed recognition of the pressures facing independent high street firms. “However, whilst any relief is welcome, the Government must recognise that this measure alone does not go nearly far enough to offset the cumulative impact of rising employment costs, taxation and the everyday costs of running a bakery,” she warned.
The update to SBBR had Allen Simpson, chief executive of UKHospitality, proclaiming the budget as the first in several years to deliver any positive news for hospitality. For hospitality and leisure businesses across England to have rates either be frozen in real terms, reduced, or cut to zero for two years from April was meaningful progress, he said.
“It shows that forceful, sustained sectoral campaigning works. We must carry on going to win the VAT cut we so badly need,” he added, highlighting that hospitality pays 82p in business taxes for every pound it makes, the highest in the economy and double that of a bank.
“While we are encouraged that we have a government that is now listening, we urge them to go further, faster, to address the unequal tax burden on the sector, and to help us unlock investment, deliver on their commitment to create jobs for young people, and growth for this industry and the economy,” commented Simpson
Lesley Cameron, chief executive of Scottish Bakers, was hoping Holyrood would decide to follow Westminster in providing business rates relief to eligible businesses in Scotland as well as England. “Without comparable relief in Scotland, our members risk being placed at a competitive disadvantage,” she said. “We would urge Scottish Ministers to use any resulting Barnett funding to ensure Scottish bakeries receive equivalent support.”
Barnett funding refers to annual block grants allocated to the devolved governments of Scotland, Wales, and Northern Ireland. A change to UK policy on business rate relief alters the baseline of government spending with devolved administrations receiving a proportional share of extra money via the Barnett formula – in 2025, this was 9.52% for Scotland, 5.49% for Wales, and 3.33% for Northern Ireland relative to England.
As expected, the Chancellor confirmed further increases to the National Living Wage and National Minimum Wages, which it said stood to benefit around 2.3 million workers. The 3.9% rise in both from 1 April translates to hourly pay of at least £13.21 for workers aged 21 and over, and at least £11.27 for 18- to 20-year olds.
CBA’s Dear asserted that their members wholeheartedly believed in paying their employees fairly. “But every increase has to be funded from somewhere, and there is simply no more room to absorb these costs,” she conceded.
“What the government repeatedly fails to recognise is that increasing the minimum wage also affects those earning just above it. Employers are left with little financial flexibility to reward experience, additional responsibilities or long service,” added Dear. “The gap between entry-level wages and those of skilled, experienced employees continues to narrow, creating further challenges for businesses trying to retain and develop their workforce.”
Dear also express deep concerns about the impact on young people.
“Independent bakeries have provided first jobs, apprenticeships and career opportunities for generations. Yet at the very time government is talking about getting more young people into employment, the cumulative cost of employing and training staff risks making those opportunities increasingly unaffordable,” she said.
In reviewing the budget, Federation of Bakers chief executive Andrew Pyne found nothing for large-scale bakery producers. “Whilst we are relieved that there hasn’t been any additional burden placed on our industry, disappointingly neither has anything of benefit been included,” he said.
Karen Betts, chief executive at The Food and Drink Federation, reserved harsher criticism as the budget failed to ease the pressures British suppliers are under.
“Food and drink manufacturing should be central to the government’s growth and reindustrialisation agenda. But time and again, we are treated as an afterthought,” she said. “The Treasury in particular has persistently failed to recognise the importance of food and drink manufacturing to jobs and prosperity the length and breadth of the UK.”
Betts singled out one of the Chancellor’s flagship announcements, removing tariffs on over 100 food and drink products to give households some breathing space, noting it will have no meaningful impact on consumer prices. “But it will undermine British factories and their workers, grappling with much higher costs, producing the same products,” she added.
The FDF chief also highlighted the government’s decision not to extend energy support, available to other manufacturing sectors, to food and drink businesses. From April 2027, the British Industrial Competitiveness Scheme is to support over 10,000 eligible businesses including suppliers of oils, fats, starches, and sugars although crucially these are non-edible products that are not to be used in the food industry.
“Our energy costs are double the European average, and this is hitting investment, jobs and growth,” said Betts. “If government is serious about tackling the cost of living, there is plenty they can do. But today they have made a clear choice to do nothing.”
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