The food and drink industry needs government support as supply chain crisis deepens
As the Chancellor assesses the damage to public spending caused by the pandemic and an economy at the mercy of global headwinds, will this be his moment to assert control and set out how the UK government will “build back better”?
On Wednesday, the Chancellor will have the opportunity to reset the UK government’s political agenda. The Budget and spending review will provide an important platform to not only unveil the usual tax and spend announcements, but critically to set departmental budgets for the coming years, following furious wrangling in Whitehall.
With a footprint in every constituency, the UK food and drink industry brings jobs and growth to every community and has the potential to contribute much more. As we begin to emerge out of the pandemic, where 430,000 food and drink workers across manufacturing kept the country fed – we want to work with the UK government to unleash our sector’s ambitions for growth.
The eyes of the UK’s 10,000 plus food and drink manufacturers will be firmly on the departmental spending envelopes to see where future investment lies. For example, what support might there be to help factories manage the crucial transition to net-zero? The Prime Minister has rightly lauded the UK’s zeal for innovation – but will this be nurtured by the Budget? Our businesses are hugely ambitious to reach more customers around the world through the export of high-quality British products – will the government back them?
We are doing all we can to remain globally competitive - but we need political backing to do so
Not everything needs to come with a price tag. We believe there is much government can do to make life easier for those running a business by committing to the principles of good regulation – always establishing the evidence to act and evaluating regulation afterwards. For example, we agree that much more must be done to tackle obesity. But taking away the ability of businesses to make shoppers aware of new, reformulated food and drink goes against the grain of government’s ambition.
Our industry is currently experiencing the erosion of the “just in time” supply chain model – which shoppers are noticing. The pandemic, the changing trading relationship with the EU and Northern Ireland and global price and supply difficulties affecting ingredients, energy and shipping has impacted resilience in UK food and drink supply chains. Consumer choice on shop shelves is reduced, while food price inflation is starting to increase significantly. For years, manufacturers have absorbed these costs but with such tight margins across the sector, there is little left to squeeze.
These problems are being compounded by a lack of workers across the “farm to fork” supply chain – according to estimates half a million workers are needed across farming, manufacturing, retail and hospitality in a multitude of roles. While employers are doing what they can to attract talent, in many places the pool of available workers simply does not exist. Automation is an option for some, but businesses need support from government to get it right.
We must make ourselves more appealing to younger people, but we also need government policy to reflect real life. For example, more flexibility in the apprenticeship levy would help us upskill our workforce and bring on the next generation. An extension to the short-term visa scheme would mean we can bring in workers to help us manage the problems we face right now, while we address the longer-term structural change to the labour market.
As the UK’s largest manufacturing sector, there is no better industry than food and drink to deliver the UK government’s levelling up agenda, while maintaining the UK’s food security. We are doing all we can to remain globally competitive - but we need political backing to do so.
Jayne Almond is the Director of Policy and Corporate Affairs at the Food and Drink Federation.
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