APPFIG meeting
The All-Party Parliamentary Furniture Industry Group (APPFIG) held a meeting on 11 November 2025. Adam Thompson MP, the Labour MP for Erewash and the APPFIG Chair, welcomed industry attendees. A range of policy issues were discussed including Industrial strategy, energy bill support, the circular economy, flammability regulations, Business Property Relief, and skills policy.
Parliamentary attendees included:
- Adam Thompson MP (Labour, Erewash)
- Iqbal Mohamed MP (Independent, Dewsbury and Batley)
- Sarah Smith MP (Labour, Hyndburn)
Confederation Lunch
The APPFIG meeting on 11 November was followed by the Confederation Lunch that provided an opportunity for industry and parliamentarians to meet and discuss industry challenges.
In addition to speaking to MPs about the sector and the policy challenges it faced, copies of the BFC’s Plan for Growth were provided to attendees. The Plan aims to engage the Government in fostering growth and resilience in the industry, which contributes over £39 billion to the UK economy and supports 245,000 jobs. The document focuses on four key areas: skills and education, trade and exports, standards and regulations, and the environment and the circular economy. Through targeted government support, improved policies, and industry collaboration, the BFC seeks to enhance manufacturing, innovation, and sustainability while ensuring the sector remains competitive globally.
BFC Executive Meetings
The BFC Executive met on 24 October to confirm arrangements for the upcoming Confederation Lunch.
Another meeting of the BFC Executive was held on 1 December. The meeting examined a range of issues including Business Property Relief, the circular economy, flammability regulations, exporting and energy bill support.
Tax Policy Concerns
The Chancellor of the Exchequer, the Rt Hon Rachel Reeves MP, announced changes to Business Property Relief (BPR) in her Autumn Budget in October 2024. Currently, any business owned by a deceased’s estate qualifies for 100% business relief from inheritance tax.
For family-owned businesses in the sector, the impact of this tax change could be considerable and focus has been placed on highlighting the concerns of the sector. Notably, the changes to BPR are similar to the changes to agriculture property relief, which triggered widespread media coverage, condemnation from opposition parties, and protests in Westminster. The BFC has raised the sector’s concerns with Government ministers and opposition spokespeople about the impact that BPR changes will have on family-owned businesses.
The Government modified its position on 23 December 2025, and this has since been confirmed in a Written Statement to Parliament delivered by Dan Tomlinson MP, Exchequer Secretary to the Treasury, on 5 January 2026. The changes are as follows:
- The allowance for 100% rate of relief will be increased from £1 million to £2.5 million when it is introduced on 6 April 2026.
- A couple will now be able to pass on up to £5 million of agricultural or business assets tax-free between them, on top of the existing allowances such as the nil-rate band.
- Taken together with the reform announced at Budget 2025, which made any unused allowance transferable between spouses or civil partners, it is now the case that widows and widowers will benefit from up to £2.5 million of their spouse’s allowance, even if their spouse passed away many years ago.
- According to Government calculations, this means that just over 80% of estates making claims for BPR are forecast to not pay any more inheritance tax.
Tomlinson explained that the increase in allowance was decided upon after ‘listening carefully to feedback from the farming community and family businesses.
Nuclear Levy and impact on businesses
On 12 August 2025, the Low Carbon Contracts Company (LCCC) confirmed the first determination of the Nuclear Regulated Asset Base (RAB) scheme in Q4 2025 setting the Interim Levy Rate at £3.455 per MWh (LCCC announcement available here). The Levy, which will be applied to electricity bills to help fund the Sizewell C nuclear power station, will apply to all electricity consumers, including non-domestic businesses. The Government has estimated this will add roughly £1 per month to household energy bills but has yet to provide estimates on the impact on businesses (DESNZ press release available here).
Background on how the Levy works:
- The Levy has been set at an average rate of £3.44 per megawatt-hour (MWh) of electricity consumed.
- It is collected from energy suppliers, who then pass it through to their customer bills.
- The Levy will be in place from 1 November 2025. The rate will vary slightly each quarter depending on national electricity demand. For example, in winter (when demand is higher), the per-MWh charge will be lower, and in summer (when demand is lower), it will be higher.
- LCCC will publish a forecast each quarter, which suppliers use, and then reconciles the difference afterwards so the average balances out to £3.44 per MWh. Forecasts suggest the Levy will average around £4 per MWh in 2026 and may vary seasonally up to £4.50 per MWh in summer.
The exact timing that the Levy will be imposed on energy bills for non-domestic consumers will depend on the type of contract a business has with its energy supplier. Pass-through or flex contracts will almost certainly see the charges passed on from November. Even companies on fixed contracts are likely see the Levy applied, though some suppliers may wait until the renewal date to pass this through depending on what the wording of the contract allows.
For companies in the sector, the best course of action is to speak directly to their supplier to confirm what will happen in regards to their energy contracts.
The Government has confirmed that around 500 of the largest electricity users (such as steelmakers) will be exempt from the Levy and will receive further discounts on network charges. However, the majority of large non-domestic users, for example utilities, retailers, transport operators, and manufacturers, will not benefit from these exemptions and will face the full impact of the Levy and other cost increases. Small Businesses and Charities have warned that it could add thousands of pounds to their bills as they will not qualify for the exemption.
Circular Economy (CE)
The BFC Executive would like to ensure early involvement of the furniture sector in developing the Ecodesign for Sustainable Products Regulation (ESPR) and Digital Product Passport requirements. The Confederation has written to DEFRA Minister Mary Creagh CBE MP, the Minister for Nature, to outline the industry’s interest in getting actively involved at the earliest stages of policy development on Extended Producer Responsibility (EPR) and the forthcoming digital product passports under the ESPR. The BFC is keen to avoid a scenario where stakeholders are consulted only at the final stages of policy development.
A reply from the Minister was received on 11 February 2025 in which the BFC’s wish to contribute to the Taskforce was welcomed. Recent industry meetings attended by Minister Creagh, DEFRA officials and BFC representatives allowed the industry’s voice to be heard but concerns exist on the level of understanding that exists on the furniture industry and its products.
The Task Force has identified six initial priority areas: agrifood; built environment; chemicals and plastics; electrical and electronic equipment; textiles and footwear; and transport (including tyres).
Although furniture and flooring are not formally designated as a standalone category, the industry is currently treated as spanning both the built environment and textiles categories. The BFC is concerned that the built environment category is too broad to reflect the specific challenges and opportunities facing furniture manufacturers and retailers. The BFC wrote again to DEFRA Minister, Mary Creagh MP, on 13 November 2025 to set out the sector’s concerns.
There is broad consensus within the industry that EPR schemes should be industry-led, with government providing the enabling environment, oversight, and enforcement powers. A model where government endorses and regulates well-designed, industry-developed EPR schemes, rather than attempting to design and manage them centrally could be more effectively implemented, given limited public finances.
Ongoing engagement with Government Departments
The BFC has continued to liaise with Civil Servants in the Department of Business and Trade to ensure that industry concerns and issues are brought to the immediate attention of government ministers. These have included labour shortages, flammability regulations, business rates relief, the future of skills and training, the cost of energy, and supply chain challenges.
The BFC has submitted a response to the Government’s Industrial Strategy and Copyright and AI consultations, focusing on the importance of the industry for the UK economy, the increased demand expected in light of the Government’s housebuilding target, and the value that is placed on British-made furniture, furnishings, beds, and floor coverings around the world.
US Tariffs on Carbon Steel
The BFC is closely monitoring developments regarding UK-US trade agreement obligations on supply chain transparency for steel and aluminium. Concern is currently focused on furniture exports to the US that contain carbon steel components and the potential to incur high US steel tariffs.
Flammability Regulations
The Government published its long-awaited response to the 2023 review of the Furniture and Furnishings (Fire) (Safety) Regulations 1988 (amended 1989, 1993 and 2010) on 22 January 2025.
In the response, the Government recognised the important role specific regulations for domestic upholstered furniture fire safety play in keeping UK consumers safe and is committed to delivering reforms that maintain a high level of fire safety while facilitating a reduction in the use of chemical flame retardants.
The BFC Executive is following developments closely in order to ensure that new legislation delivers for both consumers and businesses. The Government will provide an update later this year, setting out the final position on the remaining issues highlighted in this document and a roadmap for implementing changes.
However, the Government will be taking immediate action to amend the FFRs based on evidence collected in consultation responses. Changes to the existing legislation will be made as soon as parliamentary time allows and will take effect six months later, in line with obligations under the UK’s World Trade Organisation commitments. The main amendments are as follows:
- Remove certain baby and children’s products from scope of the FFRs, where evidence supports their removal from scope. This will reduce babies’ and children’s exposure to CFRs where the risk of exposure to potentially harmful chemicals is greater than the fire risk posed by those products. (A list of the products being removed from scope has been included at Annex A).
- Remove the requirement for manufacturers to affix a display label to new products, reflecting the limited value of the display label.
- Extend the time frame for instituting legal proceedings from 6 – 12 months, providing the right tools for effective enforcement.
The ministerial changes that occurred at DBT in September are expected to slow down decision making at the Department as Justin Madders MP who is no longer in post was leading stakeholder engagement sessions with industry.
The BFC wrote to the new Minister, Kate Dearden MP, on 12 November 2025 to seek an update and received a response on 16 December 2025.
Immigration Policy
On 12 May 2025, the Government published the Immigration White Paper, Restoring Control Over the Immigration System. While the document does not directly reference the sector, a number of proposed reforms are likely to have significant indirect consequences for manufacturers, designers, and associated trades within the UK furniture industry supply chain. Some of the provisions of the White Paper took effect on 22 July 2025, after the Government made the necessary changes to the Immigration Rules.
One of the most consequential changes is the tightening of the Skilled Worker visa route. The salary threshold for eligible roles has been increased, from £38,700 to £41,700, excluding only those listed on the Immigration Salary List and new graduate entrants.
The White Paper also introduces stricter criteria for family and dependant visas. The minimum income requirement for sponsoring a family member has increased to £29,000 and will later increase to £38,700. These measures could make the UK less attractive to migrant workers considering relocation, potentially exacerbating recruitment and retention difficulties in an already constrained labour market.
Further proposals target the student migration route, with plans to restrict international students’ ability to bring dependants and a review of the Graduate Route that currently allows post-study work.
Underlying all these proposals is a broader government aim to reduce reliance on overseas labour. The White Paper makes it clear that employers should prioritise training and recruitment of domestic workers and invest in upskilling existing staff.
Skills Policy
In May 2025, the Department for Education announced a package of reforms intended to rebuild the UK workforce by investing in young people and reducing reliance on migration. Titled Next generation of builders and carers set to rebuild Britain, the announcement outlines a £3 billion commitment to apprenticeships and skills programmes, with particular emphasis on expanding opportunities in priority sectors such as construction, healthcare, and digital industries. These changes form a key part of the Government’s wider Plan for Change and are intended to reverse declining apprenticeship uptake and address critical labour shortages.
While the press release does not specifically reference furniture or manufacturing, the inclusion of carpentry, construction skills, and technical education suggests a potential overlap with roles and competencies found across the UK furniture supply chain. Of particular note is the commitment to 120,000 new training places and 30,000 additional apprenticeships over this Parliament, alongside the creation of 10 new Technical Excellence Colleges focused on construction skills.
The announcement also outlines a significant reallocation of apprenticeship funding. From January 2026, government support will be redirected away from Level 7 (master’s-level) apprenticeships in favour of Level 2 and Level 3 qualifications – a shift that may benefit the furniture sector.
Moreover, the Government is implementing a 32 per cent increase in the Immigration Skills Charge, with the stated aim of redirecting funds to support domestic workforce development. While this reinforces the broader direction of travel outlined in the recent immigration white paper – namely, a reduced reliance on migrant labour – it also increases the cost burden on employers who continue to require international hires.
The Government announced on 7 December 2025 a Skills Reform policy, pledging that 50,000 more young people will benefit from apprenticeships. The latest Skills Reform funding includes £140 million for Mayors to connect young people, especially those not in education, employment or training (NEET), with thousands of apprenticeship opportunities with local employers.
Support for Exporters
Parliament debated plans to expand the capacity of UK Export Finance (UKEF) on 15 December 2025, with MPs from across the House backing support for exporters while offering differing perspectives on the role of subsidies, Brexit and regional priorities.
The Industry and Exports (Financial Assistance) Bill will complete its House of Commons journey early in 2026, before moving to the House of Lords for consideration. The Bill aims to lift the financial assistance cap in a range of selected areas, including the general powers section from £12,000 million to £20 billion.
The BFC wrote to Sir Chris Bryant MP, the new Minister for Trade at DBT, on 26 November 2025 setting out insights from trade events attended by BFC members and the support offered to exporters from other nations.