Chancellor Rachel Reeves has announced the suspension of tariffs on a range of food and drink items in a bid to reduce household shopping bills, as concerns over rising costs intensify. The move targets staple products including pasta, fruit juices, tuna, oranges, and peaches, with tariffs lifted until the end of 2028. This measure covers over £2 billion worth of imports into the UK.
How Tariffs Affect Prices
A tariff is a tax imposed on imported goods, typically passed on to consumers. Previously, tariffs on these items ranged from 2% to 50% of the import cost. With suspension, these charges will be reduced to zero, potentially lowering retail prices. However, the Chancellor cautioned that savings depend on businesses passing on the benefits to customers.
Focus on Non-UK Produce
The package targets products with little or no domestic production. Further items may be added after consultations with farmers and supermarkets. This follows a meeting between Reeves and major retailers like Tesco and Sainsbury's to discuss easing the cost of living amid fears that the Iran conflict could drive food inflation sharply higher.
Global Pressures on Food Supply
The closure of the Strait of Hormuz has disrupted fertiliser supplies essential for fruit and vegetable cultivation, while higher fuel costs have increased transport expenses. The Food and Drink Federation (FDF) warns that food inflation could reach 9% by end of 2026, and businesses have reported to the Bank of England a potential 7% rise.
Government Contingency Planning
Earlier this month, officials modelled worst-case scenarios of food shortages, including chicken and pork, if carbon dioxide (CO2) supplies are affected. CO2 is used in animal slaughter. Ministers stress that no shortages currently exist.
Official Statements
Rachel Reeves commented: "It is extremely frustrating to see a war we didn't start hurting family finances here at home. Whether it be through suspending tariffs to make food cheaper, taking £117 off household energy bills, or freezing rail fares and prescription charges, I will support those who need it most."
Environment Secretary Emma Reynolds added: "People are worried about what the conflict in the Middle East could mean for their food bills. That's why we're suspending select food tariffs, easing pressure on household budgets while continuing to support British farmers and keep our food supply secure. We're working closely with supermarkets, producers and suppliers to protect family finances and ensure farmers can continue producing high-quality British food."
