Budget Relief Must Be Matched By Action To Protect Fresh Produce Supply, FPC Warns

Chancellor John Healey’s Budget offers fresh produce businesses some relief through food tariff cuts and continued fuel-duty support. But the Fresh Produce Consortium’s warning about the potential cost of the UK-EU reset raises a wider question: could new border requirements undermine efforts to make fruit and vegetables more affordable?

The Budget, delivered on 28 October, includes measures to reduce selected import costs and support household finances. Alongside those savings, businesses face a higher National Living Wage from April 2027, creating a mixed outlook for growers, importers, wholesalers and retailers.

For FPC, protecting affordability also requires action beyond the Budget. Ahead of the UK-EU summit on 20 November, the consortium has warned that extending EU requirements to global fresh produce entering the UK could generate more than £300 million in avoidable annual costs. That is an industry estimate of a potential future burden, rather than a charge introduced by the Budget.

The Government’s tariff package demonstrates one way ministers can reduce costs. From 26 November 2026, tariffs on 101 selected agri-food products will be suspended until 31 December 2028. The Government estimates annual consumer benefits of £120 million to £185 million across the package, which includes aubergines.

Garlic also features in the announcements, with the Government identifying an existing tariff of 8% plus £100 per 100kg. Removing that charge could substantially reduce duty on affected imports, although the eventual saving for shoppers will depend on other supply-chain costs and how reductions are passed through.

These measures bring the relationship between trade policy and food affordability into focus. Reducing duties can help lower import costs, while additional certification, inspections and official fees could pull in the opposite direction.

FPC estimates that around four million tonnes of annual rest-of-world fresh produce imports could be affected by the proposed changes. It supports closer UK-EU trading relations but wants a long-term exemption from dynamic alignment for fresh produce imported from outside the EU and destined solely for the UK market. It argues that the existing customs border can safeguard EU requirements for produce subsequently exported there.

The Budget savings and FPC’s projected costs cover different products and policy measures, so they cannot be directly offset against one another. Nevertheless, their implications point to the same challenge for ministers: ensuring that decisions across government support affordable, reliable food supplies.

British growers could also benefit from the suspension of tariffs on specified fertilisers until 31 December 2027. The Government intends the measure to moderate prices and strengthen supply security. However, the food tariff package is targeted rather than universal, and its consultation response acknowledges concerns about competition for domestic producers and whether savings will reach consumers.

Employment costs present a separate pressure. The National Living Wage for workers aged 21 and over will rise by 50p to £13.21 an hour from 1 April 2027, an increase of 3.9%. The minimum rate for 18-to-20-year-olds will rise to £11.27.

For harvesting, grading, packing and distribution businesses, the increase will feed into workforce budgets. Illustratively, an additional 50p an hour means £20 more in basic weekly wages for someone working 40 paid hours. Across 100 employees working those hours, the increase would be £2,000 a week before associated employment costs.

Transport businesses receive some breathing space through the extension of the temporary 5p-per-litre fuel-duty cut and the postponement of the planned inflation-linked increase until 1 July 2027. This avoids an additional tax increase during the first half of next year, although underlying diesel prices will continue to influence distribution costs.

Energy support will depend on eligibility. The Budget confirms electricity-bill reductions of up to 25% for eligible manufacturers through the British Industrial Competitiveness Scheme from April 2027. It does not establish an equivalent universal discount for growers, packhouses or cold stores.

The next test therefore extends beyond implementing the Chancellor’s announcements. FPC points to 99.5% border compliance under the existing UK regime and argues that retaining proportionate, science-based controls would prevent unnecessary costs. Its message ahead of the 20 November summit is that protecting global sourcing must accompany efforts to ease bills at home.

Businesses can support the FPC's campaign through the FPC Action Pack at freshproduceaction.co.uk/action-pack.