Every year as a team we visit Sial, the largest food innovation event in Europe. One obvious takeaway this year was how few British businesses were exhibiting, and how little UK government presence was there (only Ireland and Wales).
In the past, the exhibition has been filled with UK food businesses looking to export or invest in new equipment, and it has always been well supported by the team at Business and Defra. The lack of both summarises the current situation in the food industry: quite simply, our industry has no government support or recognition. There is no growth agenda to back British food manufacturing.
Minimum wage increase
That brings us to the announcements in today’s budget. We are a great supporter of increasing the minimum wage. In fact, we have been at the forefront of wage increases as a business to attract great people – particularly on the manufacturing lines.
But this, coupled with an increase in employer national insurance, will not result in job creation as stated by the government. It will continue to fuel food prices and lead to inflation, and place a cap on the number of jobs available in our industry.
Our answer is to increase efficiency, which is why we are heavily investing in automation and redeploying people into other areas of the business – not cutting jobs, but not actively recruiting as we have in the past. That means the consumer can still enjoy a premium brand, but not pay the price.
The irony is that we go to Europe to invest in high-tech food manufacturing innovation. And yet we can’t even export our food to Europe because of the red tape, despite the market for premium UK brands.
And it’s not just food manufacturing that will be affected. Jobs in hospitality are becoming static, as many fast food and retail chains have responded by implementing self-service kiosks and other automated systems.
I totally agree with Kate Nicholls, CEO of UKHospitality, who said businesses would be approaching the budget with “even more trepidation” following the announcement of minimum wage increases. As she commented: “Trying to balance the books from the pockets of high street businesses will simply leave hospitality as collateral damage – threatening jobs, future investment, price increases for consumers, and business viability.”
‘No investment agenda’
All the above is coupled with no investment agenda from government on a bigger scale. In the past, wage increases have been offset by schemes for growth with investment in manufacturing or sustainability. But there is no indication of any incentives in this area, either at local or national level.
We are a purpose-led business and put a percentage of our profit back into our people, community, and the environment. But even our profit has been eroded with the introduction of other taxes such as EPR, which will cost our business nearly £100,000 a year. As a family business, we will continue to look at other ways to grow, such as new products and increasing our listings, but other businesses might not be able to be so agile or have the ability to invest in new technology.
According to the latest figures released by the ONS, the manufacture of food remains the largest proportion of the UK economy and represents 20.8% of total manufacturers’ sales. In light of this, we urge the government to remember that growth of the UK economy will be driven by businesses that make and do things well.
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