The founder of a family-run bakery embroiled in a dispute with Borough Market has criticised what he describes as a business climate in Labour’s Britain where successful companies are being penalised.

Matthew Jones, who established Bread Ahead, said the bakery was initially informed it would have to leave the popular London food market because the company had grown too quickly.

However, the bakery and market officials have since reached an agreement to keep the stall operating under an extended lease until 2028.

Despite that deal, Mr Jones said the renewal process had been deeply frustrating. He also criticised the wider pressures facing employers in what he called Labour’s “doom and gloom” economy, arguing that Bread Ahead’s popularity should have been viewed as a success rather than a problem.

The bakery entrepreneur said expanding overseas had proved less difficult, pointing to new Bread Ahead projects in New York and Malaysia.

His comments come as British businesses face a series of tax increases introduced by the Labour government.

Former chancellor Rachel Reeves raised the employer National Insurance rate from 13.8 per cent to 15 per cent and cut the secondary threshold to £5,000.

The changes prompted anger across the hospitality sector, with many part-time and lower-paid workers being brought into the tax system through the revised rules.

Mr Jones said: “What has happened to our country? Why are we doing this? Why are businesses being penalised?”

“Why can’t we simply give people a break and let them get on with it? Let businesses operate, employ their staff, pay their taxes and do what they need to do. That is exactly what we are trying to do.”

Bread Ahead has been serving doughnuts, sourdough bread, pastries and coffee at Borough Market since 2013.

Mr Jones said that last month, during negotiations to renew the bakery’s lease, he was told the business had been “too successful” and would need to move out.

He claimed Borough Market officials objected to Bread Ahead opening further international branches, saying this conflicted with the market’s policy. He also said representatives told him there was not enough room for a stall that draws such large crowds.

Bread Ahead is due to open its first US bakery in New York in November.

The company already operates several locations across Asia and the Middle East, including sites in Bangkok, Dubai and Saudi Arabia.

Speaking to Our News Outlet, Mr Jones said: “The entire process was infuriating. It has been incredibly frustrating, and we simply want to focus on running the business.”

“We still feel that, in the longer term, we are not really going to be welcome at Borough Market.”

“We now have an 18-month extension, but why only 18 months? Realistically, we may leave when that period ends. We have not made a final decision, but by then there could be new management with a different approach and new ideas.”

Borough Market told the Mail that the lease had always been due to expire in March 2028 and that no agreement had been made to extend it beyond that date.

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Mr Jones said: ‘It’s so much easier opening up and running a business abroad. The speed of things, there’s just no blockages in the way and everyone wants you to do it. It’s just not like that in Britain anymore.’

Mr Jones founded Bread Ahead in 2013 after leaving school at 15 and going on to work as a chef.

He said the business environment when he was growing up was much more conducive to budding entrepreneurs.

‘We had a wonderful run here but now it just feels like banging my head against a brick wall,’ he added.  

The company has become an online sensation thanks to visitors’ glowing reviews of its baked goods.

But the bakery owner told the Mail that it could cost up to £1,000,000 to move the shop out of Borough Market and into another London location.

He previously said that it could put the jobs of its 83 employees at risk.

He told the Mail today: ‘We’re not a big business. We’re not Greggs. We’re not Gail’s. You know, we’re not SpaceX. We’re a family business and we started with nothing.

‘Ultimately we’ll just have to find another location locally and move into it because we want to be there for our customers. We don’t want to disappoint people, and it’s great trade. We’ve built up a local reputation. 

‘It is such a bizarre scenario.’ 

Shane Holland, Chair of the Borough Market Trust, said: ‘Our position on Bread Ahead’s lease expiry is unchanged, and it is important to clarify that the extension agreed does not secure a long-term future for the business at the Market.

‘This extension was first discussed in July and has remained on the table throughout our recent negotiations. We’re pleased that Bread Ahead has now accepted, providing additional time to plan for the end of its current tenancy. No agreement has been reached for the period beyond March 2028.

‘As with all traders approaching the end of their lease, we will continue to work constructively with Bread Ahead throughout the remainder of its lease.’

Hospitality owners have been beset with challenges in recent years with rising bills as well as the impact of Labour’s previous policies, including tax hikes and sharp increases in the minimum wage. 

And the situation could get worse with the Budget on October 28 amid speculation Chancellor John Healey could hike taxes even more.

The higher costs are holding back hiring of young people, with 20pc fewer 16 to 20-year-olds now employed by the business than in 2023.

 Allen Simpson, the chief executive of UK Hospitality, said the change to NICs was ‘the single biggest contribution to job losses we have seen in hospitality over the last two years’.