More than half of private sector firms are planning price hikes to help offset looming tax increases announced in the chancellor’s first budget , according to a corporate lobby group.

The British Chambers of Commerce (BCC) warned business confidence was at its lowest level since the market meltdown that followed the Conservatives’ mini budget of autumn 2022.

Its survey of almost 5,000 firms found worries about tax stood at levels not seen since 2017.

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Labour had fought a growth-focused election on the back of an improved working relationship with business but there was a widespread sense of shock when the 30 October budget put businesses on the hook for the bulk of £40bn of tax increases.

The new government argued the hikes were necessary to lock in long overdue investment in public services due to an alleged black hole in the public finances inherited from the Tories.

But companies widely warned the higher costs, from measures such as higher employer National Insurance contributions and National Living Wage increases from April, would be passed on to customers and hit wage growth, employment and investment.

At a time when the Bank of England is struggling to cut interest rates due to stubborn cost pressures in the economy, there will be concern among policymakers over the threat posed by potential business price hikes ahead.

The BCC survey found 55% of companies were planning to raise their own sales costs.

Such a move would threaten further upwards pressure on inflation while weak business confidence will also do little to lift the economy out of the doldrums witnessed during the second half of 2024 when government warnings of a “tough” budget ahead were widely blamed for hitting sentiment.

Financial markets currently see just a 60% chance of a Bank rate cut at the next meeting in a month’s time.

BCC director general Shevaun Haviland said: “The worrying reverberations of the budget are clear to see in our survey data. Businesses’ confidence has slumped in a pressure cooker of rising costs and taxes.

“Firms of all shapes and sizes are telling us the national insurance hike is particularly damaging. Businesses are already cutting back on investment and say they will have to put up prices in the coming months.

“The government is rightly coming up with long-term strategies on industry, infrastructure and trade. But those plans won’t help businesses struggling now.

“Business stands ready to work in partnership to make the proposed Employment Rights legislation work for all, but the current plans will add further costs on firms.”

The BCC said the government could help firms absorb the additional pressures in areas such as business rates reform and through infrastructure investment.

A Treasury spokesperson said in response: “We delivered a once in a parliament budget to wipe the slate clean and deliver the stability businesses so desperately need.

“We have ensured more than half of employers will either see a cut or no change in their National Insurance bills, and by capping the rate of corporation tax at the lowest level in the G7, creating pension megafunds and establishing a National Wealth Fund, we are bringing back political and financial stability, creating the conditions for economic growth through investment and reform.

“This is just the start of our Plan for Change which will unlock investment, get Britain building via planning reform, and employ a modern Industrial Strategy to deliver the certainty and stability businesses need to invest in the UK’s growing and high potential sectors. This will make all parts of the country better off.”

A television network majority-owned by David Montgomery, the media entrepreneur, is to snap up the licence to operate a London-focused TV station from Lord Lebedev, owner of the capital’s weekly Standard newspaper.

Sky News has learnt that Local TV Ltd, which was acquired by Mr Montgomery in 2017, is close to announcing a deal to buy the London licence from London Live.

Lord Lebedev was said last month to be exploring a sale of the London Live station he launched in 2014, with The Sunday Times reporting that it had lost more than £20m since it was established.

One media industry source said the deal would take Local TV’s share of the locally broadcast television market to roughly 60%.

It already has channels focused on locations including Birmingham, Leeds and Cardiff.

The company’s eight existing channels are broadcast to more than five million UK households.

While owned by Mr Montgomery, Local TV is run by Lesley Mackenzie, its chief executive.

Mr Montgomery, the former Mirror Group Newspapers executive, has also been involved in the auction of The Daily Telegraph, having tabled an offer for the right-leaning newspaper last year.

He was reported this weekend to have met Todd Boehly, the Chelsea Football Club co-owner, about collaborating on a bid.

Tim Kirkman, the London Live managing director, declined to comment when reached by Sky News on Sunday afternoon, while Local TV could not be reached for comment.

Outside it is the bleak midwinter. We are smack bang in the middle of some of the country’s best agricultural land.

But inside the cavernous warehouse where we’ve come, you wouldn’t have a clue about any of that: there is no daylight; it feels like it could be any time of the day, any season of the year.

We are at Fischer Farms – Europe’s biggest vertical farm.

The whole point of a vertical farm is to create an environment where you can grow plants, stacked on top of each other (hence: vertical) in high density. The idea being that you can grow your salads or peas somewhere close to the cities where they’re consumed rather than hundreds of miles away. Location is not supposed to matter.

So the fact that this particular one is to be found amid the fields a few miles outside Norwich is somewhat irrelevant. It could be anywhere. Indeed, unlike most farms, which are sometimes named after the family that owns them or a local landmark, this one is simply called “Farm 2”. “Farm 1” is to be found in Staffordshire, in case you were wondering.

Farm boss’s dizzying ambition

These futuristic farm units are the brainwave of Tristan Fischer, a serial entrepreneur who has spent much of his career working on renewable energy in its various guises. His ambition now is dizzying: to be able to grow not just basil and chives in a farm like this but to grow other, trickier and more competitive crops too – from strawberries to wheat and rice.

Only then, he says, can vertical farming stand a chance of truly changing the world.

The idea behind vertical farming itself is more than a century old. Back in 1915, American geologist Gilbert Ellis Bailey described how it could be done in theory. In theory, one should be able to grow plants hydroponically – in other words with a mineral substrate instead of soil – in a controlled environment and thereby increase the yield dramatically.

In one sense this is what’s already being done in greenhouses across much of Northern Europe and the US, where tomatoes and other warm-weather-loving vegetables are grown in temperature-controlled environments. However, while most of these greenhouses still depend on natural light (if sometimes bolstered by electric bulbs) the point behind vertical farming was that by controlling the amount of light, one could grow more or less everything, any time of the year. And by stacking the crops together one could yield even more crops in each acre of land one was using.

Look at a long-term chart of agricultural yields in this country and you start to see why this might matter. The quantity of crops we grow in each acre of land jumped dramatically in the second half of the 20th century – a consequence in part of liberal use of artificial fertiliser and in part of new technologies and systems. But that productivity rate started to tail off towards the end of the century.

‘Changing the equation’

Vertical farming promises, if it can make the numbers add up, to change the equation, dramatically increasing agricultural productivity in the coming decades. The question is whether the technology is there yet.

And when it comes to the technology, one thing has certainly changed. Those early vertical farms (the first attempts actually date back to the 1950s) all had a big problem: the bulbs. Incandescent bulbs were both too hot and too energy intensive to work in these environments. But the latest generation of LED bulbs are both cool and cheap, and it’s these bulbs you need (in vast numbers) if you’re going to make vertical farming work.

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Here at Farm 2, you encounter row after row of trays, each stacked on top of each other, each carrying increasingly leafy basil plants. They sit under thousands of little LED bulbs which are tuned to precisely the right spectral frequency to encourage the plant to grow rapidly.

Mr Fischer says: “We’re on this downward cost curve on LEDs. And then when you think about other main inputs, energy – renewable energy – is constantly coming down as well.

“So you think about all the big drivers of vertical farming, they’re going down, whereas compared to full-grown crops, everything’s going up – the fertilisers, rents, water is becoming more expensive too.”

This farm – which currently sells to restaurant chains rather than direct to consumers – is now cost-competitive with the basil shipped (or more often flown) in from the Mediterranean and North Africa. The carbon footprint is considerably lower too.

“And our long-term goal is that we can get a lot cheaper,” says Mr Fischer. “If you look at Farm 1, we spent about £2.5m on lights in 2018. Fast forward to Farm 2; it’s seven and a half times bigger and in those three years the lights were effectively half the price. We’re also probably using 60 to 70 percent less power.”

It might seem odd to hear a farmer talk so much about energy and comparatively less about the kinds of things one associates with farmers – the soil or tractors or the weather – but vertical farming is in large part an energy business. If energy prices are low enough, it makes the crops here considerably cheaper.

But here in the UK, with power costs higher than anywhere else in the developed world, the prospects for this business are more challenged than elsewhere. Still, Mr Fischer’s objective is to prove the business case here before building bigger units elsewhere, in countries with much cheaper power.

In much the same way as Dutch growers came to dominate those greenhouses, he thinks the UK has a chance of dominating this new agricultural sector.