What is the mood of the industry in the face of what is likely to be a decisive year? Policy changes on both sides of the Atlantic, and continuing supply chain disruption borne out of prolonged global conflict and uncertainty, make major change inevitable – though in many cases its direction is profoundly unclear.
I have spent much of the past couple of months taking the industry’s temperature, speaking to CEOs and owners of food businesses across the country. There is a lot of worry about those malign external impacts – the potential for US tariffs on UK food, the possibility of a global trade war, and the likely disruption to supply chains from burgeoning regional conflicts all feature prominently. But there is little UK business can do to influence these, though it must thoroughly prepare for the worst.
We can do much more about UK matters. There is very significant concern over this government’s understanding of and care for the food and drink industry. Bosses are, of course, seriously bothered by the huge burden handed down from the Rachel Reeves budget.
The combination of increases to National Insurance, the national minimum living wage and much-delayed environmental levies create a £7bn additional cost, which most businesses can only hand on to customers or seek to share with suppliers.
No one to whom I spoke believes the funding of the NHS and school buildings is anything other than desperately needed. Our industry leaders should have been more enthusiastic about welcoming this investment as good for business and good for Britain. That would have allowed them to express their caveat – briefly summarised as “where’s the NHS reform plan?” – without sounding like nasty capitalists who don’t care about the needs of ordinary people.
But there are two other, equally important, concerns gnawing away. The first is that ministers don’t have a plan for the economy. The failure to back increased funding for the NHS with a reform plan is one example. The absence of an immediate explanation as to whether the NHS exemption for NIC charges extended to GP practices, pharmacies, care homes and hospices is another.
“They don’t seem to know what they’re doing,” one Labour-supporting boss told me. He went on: “That’s shocking when they’ve had 13 years to think about it.” It’s a sentiment shared by many.
The second big worry is that economic ministers don’t understand the place of food and drink in the UK economy. The evidence so far is mounting. In early iterations of policy on advanced manufacturing and growth, food and drink – by some way the largest manufacturing sector – doesn’t seem to feature.
The changes to Inheritance Tax on farmers were, according to senior civil servants to whom I have spoken, presented as a fait accompli to Defra ministers, and absolutely missed the likelihood of the explosion of anger they prompted.
Many expect a similarly big jolt for mainstream manufacturers when the latest National Food Strategy is unveiled. It will take aim at both HFSS and and so-called ultra-processed foods. As I have said many times in these columns, the hand of Henry Dimbleby will be evident. Indeed his piece here last week read like an elegant “I told you so”.
His recent report lists more than 20 former ministers agreeing with the notion that the food industry has obstructed change to grow profit. It should be noted the reason why all of the quoted leaders are no longer in office is that the electorate turfed them out. This was, at least in part, because they each fell foul of the cause for political failure worldwide: when middle-class politicians tell working-class people what to do, they invariably lose.
In this regard, one wild card is the possibility of a Reform UK breakthrough over the next few years. As Nigel Farage’s appeal continues to grow, attention will centre on his policy programme. Given his feel for the buttons to press, it is a racing certainty that he will orientate his party towards populist rejection of prescriptive food and drink policies. That might change the whole centre of gravity in the wider discussions on food policy.
But there is absolutely no future in aligning with siren voices from Farage or any other single party. Instead, the entire political class needs constant reminders of food and drink’s importance. That is down to our industry’s representatives and those who run businesses at every level. They absolutely must engage with politicians and policymakers.
During Covid and through the extended Brexit imbroglio, that sort of contact was inevitable, and it yielded dividends in terms of much better understanding. We need to be back on it and fast. Otherwise 2025 will be very tricky indeed.
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