The countdown to the July 4th general election has begun in earnest, and with each political party's manifesto having been released, the fine food industry will be making its decision on who should lead the next government.
Speciality Food speaks to leading voices in retail, food and agriculture to get a sense of the state of the industry ahead of the election.
Putting independent shops 'top of the list'
All political parties must make the revival of independent retail a “top priority” according to the British Independent Retailers Association Bira. “The current climate poses significant challenges which threaten the very existence of these businesses and the vibrancy of our high streets,” Bira's CEO Andrew Goodacre warned.
He called the upcoming election a “pivotal juncture” and called on political parties to “commit to a new era of policies that put independent retailers first.”
“Their survival supports the identity of our downtown as the hub of the community,” he continued.
Mr Villa's manifesto includes a series of demands to revitalise city centres, including reducing or eliminating business taxes, accelerating investment in high streets across the country, providing funding to help small retailers invest in environmental sustainability and technology, introducing flexible commercial energy contracts and eradicating retail crime.
Villa said creating a diverse downtown that promotes sustainability, inclusivity and economic growth won't be possible without “major reforms” that ease the burden on independent merchants.
Business Tax Reform, Retail Crime and Taxes
Labour's manifesto contains “a wealth of good policies to help retailers invest in their future, develop the skills of their workforce and contribute to growing the UK economy,” said Helen Dickinson, chief executive of the British Retail Consortium (BRC).
“From replacing our dysfunctional business rates system to reforming the draconian Apprenticeship Levy, Labour is committed to delivering reforms that will have a meaningful impact on retailers and their customers,” she continued.
Labour's manifesto says it will replace the business rates system which “discourages investment, creates uncertainty and places undue burdens” on high streets with a new “fairer” system which “levels the playing field” between high street and online retailers.
But Sam Robinson, a senior research fellow at the non-partisan think tank the Social Market Foundation, said that while the proposals were an “eye-catching” and good idea, “it's strange and a bit disconcerting that Labour has not yet even outlined what they would replace it with”.
Labour's manifesto “recognises the importance of Britain's small businesses and the self-employed”, Tina McKenzie, policy director at the Federation of Small Businesses (FSB), said, but added that small businesses “will want further reassurance from the party about the huge amounts of tax they already pay at every stage of their operations”.
Responding to the Conservative manifesto, Tina welcomed plans to abolish National Insurance contributions for the self-employed within the next five years, but added that the FSB wanted “a similar business-friendly tax proposal” to support small limited companies. She said it was also “encouraging” that the Conservatives were considering further raising the VAT threshold.
“Whoever wins the next election, there is much work to be done to ensure the UK has the strong small business economy we all need,” Tina said.
Retail crime has also come under scrutiny, with shoplifting rates having recently risen to record highs. The BRC welcomed Labour's pledge to create a new specific offence for assaulting retail staff to protect them from intimidation and violence. “Furthermore, the manifesto commits to taking tough action against shoplifting, which costs retailers £1.8 billion in 2023/24,” Helen said.
A vibrant domestic food sector is essential
The Conservative, Labour and Liberal Democrats all acknowledge the importance of food security to UK national security in their manifestos. The NFU welcomed this, alongside promises from the Liberal Democrats and Conservatives to increase the UK agriculture budget by £1 billion, Labour to promote the highest levels of food imports, and the Conservatives to introduce legally binding targets to strengthen food security.
But NFU president Tom Bradshaw said it was “deeply disappointing” that there was no mention of an agriculture budget in Labour's manifesto.
“The most important element is the agriculture budget. This is not just 'money for farmers', it is money that will enable the agriculture sector to move away from the old EU system, enable agricultural businesses to invest in the future and enable the Government's ambitions on sustainable food production, food security, the environment and net zero,” Tom said.
“This is money to support the food and drink sector, the UK's largest manufacturing sector, which contributes more than £128 billion to the national economy and provides jobs for four million people,” he added.
The NFU also welcomed commitments from all three parties to support UK food producers by increasing public sector procurement from British farms, with both the Conservatives and Labour committing to ensure that at least 50% of public sector food is either locally produced or sourced to higher environmental standards.
“We continue to engage with candidates from all political parties to highlight the importance of a thriving home-grown food sector and the need for strong, profitable farming and growing businesses to support it,” Tom said.
Focus on international trade
Recently introduced border checks after Britain left the EU are causing headaches for high-end food businesses importing food from the EU, while British exporters to the EU are facing increased costs and confusion over labelling.
While the Conservative manifesto claims UK exports are growing, David Jinks, head of consumer research at parcel delivery company ParcelHero, said: “Good exporters are struggling to cope with the impact of Brexit, the true scale of which is only becoming clear as further border control measures are implemented.”
The Conservative manifesto says the UK has secured trade deals with 73 countries and the EU, removing trade barriers worth £1 million every hour. “That may be true,” says Parcelhero's David. “But new trade barriers have been imposed, affecting exports to the EU in a variety of ways. And the manifesto makes no mention of the issue of the all-important trade deal with the US that was promised as a Brexit bonus,” he said.
Meanwhile, the Liberal Democrat manifesto offered a “ray of hope” for the food and drink industry with its “commitment to negotiate comprehensive veterinary and phyto-health agreements”, explained Mark Lynch, partner at corporate finance firm Oguma Partners.
While Mark said a commitment to rejoin the current EU veterinary and phytosanitary regimes would be preferable, he praised the Liberal Democrats for being the only party that “recognizes the damage that this area of ​​Brexit has done to UK food exports.” “Let's hope that we can reach an agreement on this issue as a first step to helping the food and drink industry rebuild exports to our largest trading partner,” he continued.
Labour also noted the plight of small food exporters since Brexit. “Towards the end of the Labour manifesto there is a pledge to 'seek to negotiate a veterinary agreement to avoid unnecessary border checks and work to reduce food prices'. This is great news for the food industry and consumers, particularly small food exporters who have been hit hard by Brexit-related issues,” Mark said.
FSB statistics show one in five small businesses are concerned about their import/export costs over the next five years and fear that “supply chains are at risk of collapse” unless the next government prioritises international trade.
“Strengthening trading links with key markets like the EU and the US is key to the UK's future as a global trading power,” said the FSB's Tina. “This will also incentivise small and medium-sized enterprises to start and continue trading.” Creating an online portal that collects all the information that SMEs only need to provide once is part of the FSB's manifesto for small businesses.
Focus on children's health
The ongoing HFSS regulation is changing the UK food and drink landscape and Labour's manifesto goes further, promising a new children's health and weight strategy that will include measures such as banning the sale of highly caffeinated, high-sugar energy drinks, introducing a 9pm limit on unhealthy food and drink and online advertising restrictions.
“We applaud Labour for putting children's health at the heart of its future strategy,” said Barbara Crowther, manager of the Children's Food Campaign. “All the evidence shows that energy drinks, high in caffeine, are harmful to children's physical and mental health.”
“It's absurd that sugary, caffeinated energy drinks can be marketed directly to children despite being required to carry a 'not suitable for children' warning,” she continued. “Closing this loophole makes perfect sense. Energy drink companies should never be allowed to make profits at the expense of children's health.”
She called on all political parties to adopt a comprehensive child health strategy “using the full range of transformative levers, including healthy school meals for all, more honest labelling, incentives for healthier food industries, early childhood feeding initiatives and expanding nutrition safety nets such as Healthy Start”.
Cost of living crisis
Despite official figures showing food price inflation fell in May, businesses and consumers continue to face rising prices and bills.
Small businesses remain concerned about economic growth, according to the FSB. “With just weeks to go until the election, no political party has yet put forward a convincing vision for achieving steady growth of 2-3 percent per year,” FSB national chairman Martin McTeigue said. “To ensure that GDP rises and is sustained at healthy levels, the next government must make this a priority.”
According to the FSB's latest Small Business Index, small business confidence scores rose into positive territory for the first time in two years in the first quarter, but the domestic economy is still seen as the biggest barrier to growth.
“Small businesses are key to our economic recovery. After all, they are the ones that drive innovation and create jobs. Supporting small businesses is a sure way to strengthen our economy and ensure lasting growth,” Martin continued. And he's hopeful about the country's future after the election. “The next administration has a lot of work to do, but with the right focus, they can make a significant impact on our economy.”
