The coalition’s first year has not had the disastrous impact on the industry many feared it would, but now actions need to match words. Nick Hughes reports
Against the odds, the coalition government of Conservatives and Liberal Democrats has survived a year intact. But what's been even more striking about the coalition's first year in office is that it has succeeded in getting so much done.
Having inherited an economy on the brink of meltdown, it was expected to focus its attentions relentlessly on reducing the budget deficit at the expense of all other policy-making. Yet we have already seen radical reform programmes initiated in the NHS and education, and a fundamental shift in attitude to the role the state should play in people's lives through the Big Society agenda.
There's a strong cost cutting dimension to some of these initiatives, of course. And from a grocery point of view, some aspects of government policy have had an adverse impact on business. But others have had a surprisingly positive effect. Even fiscal policy has engendered both wins and losses for business. Cuts to corporation tax and fuel duty have to be weighed against increases in VAT, national insurance and the national minimum wage, but they show that the government is at least trying to mitigate some of the pain.
On the whole there is recognition from the grocery industry that the tough choices made by the government have been both necessary and fair. "The general outline they set out at the start of their term was the right approach," says Andrew Opie, director of food and sustainability at the British Retail Consortium. "The recovery is still the key issue and now we want to see the projections working out."
To date, those projections have proved overambitious. In March, the independent Office for Budget Responsibility revised its central forecast for economic growth in 2011 downwards from 2.1% to 1.7% as higher-than-expected inflation continued to squeeze disposable income. The revision prompted Chancellor George Osborne to stress during his Budget speech that the success or otherwise of the coalition's economic strategy should be judged at the culmination of its four-year recovery plan.
If his economic measures have been motivated entirely by financial necessity, the same cannot be said of the coalition's philosophical commitment to deregulation and the decentralisation of power, which has major implications for planning and public health.
Business secretary Vince Cable recently launched the government's Red Tape Challenge, an online initiative inviting businesses to comment on current regulations and suggest those they think should be cut. Hospitality, food and drink is the first sector to come under the spotlight, and his call has already elicited thousands of responses on issues such as food labelling and Sunday trading.
Opie says the BRC is encouraged by the drive to slash red tape which, he says, if successful, will be of even greater financial benefit to retailers than tax breaks. However, he stresses, efforts must be targeted at employment and planning, where excessive red tape causes most disruption to business.
The government has already laid out what David Cameron describes as "radical" changes to the planning system. The forthcoming publication of the National Planning Policy Framework will see the current raft of planning policy statements that form national policy replaced by one policy framework that will presume in favour of sustainable development. At the same time, the Localism Bill will give local people a greater say over development in their area.
The proof of just how radical the reboot of the planning system is will be in the delivery. One legal expert is sceptical that the focus on localism will speed up the planning process. "Governments have been saying they are going to streamline planning policy since 1948," he says. "There's a new procedure here a very bureaucratic procedure when you look at what has to be done to get a local development plan through but nothing's going to happen any more quickly than doing it through the old local planning process."
Nevertheless, decentralisation is clearly a key component of the coalition's societal vision, as has been demonstrated in its public health policy. The Responsibility Deal in effect allows the industry to self-regulate on issues of food health, on the proviso that a lack of action will result in regulation further down the line. This means continuing to cut salt levels, removing transfats and displaying nutritional information out of home.
The tobacco and drinks industries are also on a tighter leash, having been hit not only with hikes in duty but by respective bans on tobacco displays and below-cost selling. Heineken UK MD Stefan Orlowski reflects the views of most drinks suppliers when he predicts the below-cost ban won't have any impact. "These broad-based measures are limited in what they can really hope to achieve."
As a concept, however, he believes the Responsibility Deal "puts us in a good place to talk with legislators about creating an environment in which we're able to do things that take us in the direction we want to go in".
One issue on which the government faces accusations of a lack of engagement is the environment. Having boldly declared itself "the greenest government ever" on taking office, it has done "very little" to drive forward the work the previous administration began on food security and sustainability, says Mark Driscoll, head of the One Planet Food Programme at WWF UK. The Food 2030 report, published shortly before last year's general election, identified food security as a cross-departmental priority. "Unfortunately, the government has been very slow to deliver an action plan," says Driscoll.
Independent bodies such as the Sustainable Development Commission and the Food Standards Agency, which were responsible for driving the sustainability agenda, have either been disbanded or had their responsibilities curtailed, so there is currently no independent government adviser on food and sustainability. "That is a big mistake," claims Driscoll, who adds that, with Defra, DECC and DH holding responsibility for different aspects of food policy, there is a lack of joined-up government thinking on food security, greenhouse gas emissions and water scarcity.
Action has also been slow on the issue of the grocery adjudicator, the Bill for which is now unlikely to be agreed until 2012. "Currently we have a rule book but no referee," says FDF director of communications Terry Jones, referring to the Grocery Supply Code of Practice published last year.
Opie, however, claims the government is sticking to the timetable it set at the start of its tenure. "That period allows government to analyse the impact of GSCOP and whether it is necessary to go further in terms of an adjudicator."
The government's actions on the adjudicator is another example of what he describes as the "good intentions" that have characterised its first year in office. "Year two through to the end is now about delivery," he says.
Only then will the true impact of the coalition be measurable.
Against the odds, the coalition government of Conservatives and Liberal Democrats has survived a year intact. But what's been even more striking about the coalition's first year in office is that it has succeeded in getting so much done.
Having inherited an economy on the brink of meltdown, it was expected to focus its attentions relentlessly on reducing the budget deficit at the expense of all other policy-making. Yet we have already seen radical reform programmes initiated in the NHS and education, and a fundamental shift in attitude to the role the state should play in people's lives through the Big Society agenda.
There's a strong cost cutting dimension to some of these initiatives, of course. And from a grocery point of view, some aspects of government policy have had an adverse impact on business. But others have had a surprisingly positive effect. Even fiscal policy has engendered both wins and losses for business. Cuts to corporation tax and fuel duty have to be weighed against increases in VAT, national insurance and the national minimum wage, but they show that the government is at least trying to mitigate some of the pain.
On the whole there is recognition from the grocery industry that the tough choices made by the government have been both necessary and fair. "The general outline they set out at the start of their term was the right approach," says Andrew Opie, director of food and sustainability at the British Retail Consortium. "The recovery is still the key issue and now we want to see the projections working out."
To date, those projections have proved overambitious. In March, the independent Office for Budget Responsibility revised its central forecast for economic growth in 2011 downwards from 2.1% to 1.7% as higher-than-expected inflation continued to squeeze disposable income. The revision prompted Chancellor George Osborne to stress during his Budget speech that the success or otherwise of the coalition's economic strategy should be judged at the culmination of its four-year recovery plan.
If his economic measures have been motivated entirely by financial necessity, the same cannot be said of the coalition's philosophical commitment to deregulation and the decentralisation of power, which has major implications for planning and public health.
Business secretary Vince Cable recently launched the government's Red Tape Challenge, an online initiative inviting businesses to comment on current regulations and suggest those they think should be cut. Hospitality, food and drink is the first sector to come under the spotlight, and his call has already elicited thousands of responses on issues such as food labelling and Sunday trading.
Opie says the BRC is encouraged by the drive to slash red tape which, he says, if successful, will be of even greater financial benefit to retailers than tax breaks. However, he stresses, efforts must be targeted at employment and planning, where excessive red tape causes most disruption to business.
The government has already laid out what David Cameron describes as "radical" changes to the planning system. The forthcoming publication of the National Planning Policy Framework will see the current raft of planning policy statements that form national policy replaced by one policy framework that will presume in favour of sustainable development. At the same time, the Localism Bill will give local people a greater say over development in their area.
The proof of just how radical the reboot of the planning system is will be in the delivery. One legal expert is sceptical that the focus on localism will speed up the planning process. "Governments have been saying they are going to streamline planning policy since 1948," he says. "There's a new procedure here a very bureaucratic procedure when you look at what has to be done to get a local development plan through but nothing's going to happen any more quickly than doing it through the old local planning process."
Nevertheless, decentralisation is clearly a key component of the coalition's societal vision, as has been demonstrated in its public health policy. The Responsibility Deal in effect allows the industry to self-regulate on issues of food health, on the proviso that a lack of action will result in regulation further down the line. This means continuing to cut salt levels, removing transfats and displaying nutritional information out of home.
The tobacco and drinks industries are also on a tighter leash, having been hit not only with hikes in duty but by respective bans on tobacco displays and below-cost selling. Heineken UK MD Stefan Orlowski reflects the views of most drinks suppliers when he predicts the below-cost ban won't have any impact. "These broad-based measures are limited in what they can really hope to achieve."
As a concept, however, he believes the Responsibility Deal "puts us in a good place to talk with legislators about creating an environment in which we're able to do things that take us in the direction we want to go in".
One issue on which the government faces accusations of a lack of engagement is the environment. Having boldly declared itself "the greenest government ever" on taking office, it has done "very little" to drive forward the work the previous administration began on food security and sustainability, says Mark Driscoll, head of the One Planet Food Programme at WWF UK. The Food 2030 report, published shortly before last year's general election, identified food security as a cross-departmental priority. "Unfortunately, the government has been very slow to deliver an action plan," says Driscoll.
Independent bodies such as the Sustainable Development Commission and the Food Standards Agency, which were responsible for driving the sustainability agenda, have either been disbanded or had their responsibilities curtailed, so there is currently no independent government adviser on food and sustainability. "That is a big mistake," claims Driscoll, who adds that, with Defra, DECC and DH holding responsibility for different aspects of food policy, there is a lack of joined-up government thinking on food security, greenhouse gas emissions and water scarcity.
Action has also been slow on the issue of the grocery adjudicator, the Bill for which is now unlikely to be agreed until 2012. "Currently we have a rule book but no referee," says FDF director of communications Terry Jones, referring to the Grocery Supply Code of Practice published last year.
Opie, however, claims the government is sticking to the timetable it set at the start of its tenure. "That period allows government to analyse the impact of GSCOP and whether it is necessary to go further in terms of an adjudicator."
The government's actions on the adjudicator is another example of what he describes as the "good intentions" that have characterised its first year in office. "Year two through to the end is now about delivery," he says.
Only then will the true impact of the coalition be measurable.
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