UK food and agri-food organisations, pressure groups and market watchers have responded to the Labour Party’s post-election blueprint.
After 14 years in opposition, the UK’s Labour Party has a chance of forming the country’s next government after the General Election on 4 July – a very good chance if the opinion polls are to be believed – which makes it worthwhile to look at its election manifesto to ascertain what its plans might be in relation to the agri-food sector.
A focus on big-ticket issues
Manifestos by their nature tend not to go into granular detail, instead focusing during a relatively short campaign on the big issues that can be communicated to voters in headline terms.
As food industry analyst Clive Black, a director at UK investment company Shore Capital, puts it: “Labour’s manifesto is a framework for the big thoughts.”
Before the manifesto’s publication, Labour announced its Child Health Action Plan initiative, containing a number of measures to improve children’s well-being. The plan would see Labour, if elected, ban the sale of high-caffeine energy drinks to teenagers.
The plan would also see the party fulfil its long-held commitment to tackle childhood obesity by implementing a 9pm watershed for so-called junk food advertising aimed at children and a ban on paid-for advertising of less healthy foods targeted at kids on online media.
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By GlobalData
But the manifesto, when it arrived last week, focused on big-ticket issues such as skills, immigration and labour needs and trade deals.
Not that these are unimportant to the food and agri-food industries.
Labour on migration
On skills and immigration, for example, the end of the free movement of labour between the UK and the EU post-Brexit has left certain food and agri-food sectors – such as fruit and vegetable growing and meatpacking – facing a shortage of workers, leading to food security fears about supplies on supermarket shelves.
But in its manifesto, Labour said it will reduce net migration.
“The overall level must be properly controlled and managed. Failure to do so reduces the incentives for businesses to train locally,” it said.
“We will reform the points-based immigration system so that it is fair and properly managed, with appropriate restrictions on visas, and by linking immigration and skills policy. Labour will not tolerate employers or recruitment agencies abusing the visa system. And we will not stand for breaches of employment law. Employers who flout the rules will be barred from hiring workers from abroad.”
Labour said it will ensure that migration to address skills shortages “triggers a plan to upskill workers and improve working conditions in the UK”.
But it warned: “The days of a sector languishing endlessly on immigration shortage lists with no action to train up workers will come to an end.”
Rod Addy, director general of the dairy-, meat- and seafood-focused Provision Trade Federation (PTF), says: “All the evidence shows us we need a better system for managing legal and illegal migration. However, evidence also shows that skilled migrant workers contribute to the UK economy.
“While PTF does not favour a low-wage, low-skill economy, we support increased automation and digitalisation in the food industry and not all food companies are in the same place when it comes to technology adoption.
“The government needs to work with and support the food industry during a transition period by enabling access to sufficient numbers of skilled and semi-skilled workers to maintain production levels and should incentivise and increase access to the skills necessary to handle new technology.”
Training the future UK workforce
On the issue of training and backing apprenticeship schemes, Labour said it will guarantee access to training, an apprenticeship, or support to find work for all 18- to 21-year-olds, to bring down the number of young people who are not learning or earning.
“Apprenticeship numbers have plummeted. Skills shortages are widespread. Young people have been left without the opportunities they need. The result is an economy without the necessary skills, nor any plan for the skills needs of the future,” it said.
Labour says it will establish Skills England to bring together business, training providers and unions with national and local government to “ensure we have the highly trained workforce needed to deliver Labour’s Industrial Strategy”.
It has also pledged to reform the Conservatives’ “broken” Apprenticeships Levy. “The current rigid rules ignore vital skills and training needed to access apprenticeships,” Labour says.
Kate Nicholls, chief executive of UKHospitality, which represents many foodservice operators, agrees with the plan to reform the levy. “Reform of the Apprenticeship Levy would be transformational for our investment in skills and help us attract more people into the rewarding roles we have to offer,” she says.
“Reform of the levy would, crucially, free up funds to enable the rollout of our successful skills pilot to help people out of work into jobs in hospitality.”
Addy at the PTF adds: “The Apprenticeship Levy requires an overhaul to ensure all types of businesses are benefiting from it. The future health of the food industry will also be supported by focusing on strengthening the supply of potential apprentices into the sector and the career pathways for development in food from primary school onwards.
“This is particularly vital given that the food and drink industry is the largest employer in the UK and represents the largest manufacturing sector in terms of worker numbers.”
Border concerns
Like the size of the UK’s available labour force, controls at the border are another post-Brexit issue that has to be dealt with.
The UK’s Border Target Operating Model (BTOM), which has been in operation since 30 April, includes physical checks for “the highest risk goods” and document checks for “consignments of all risk levels”, according to the Department of Environment, Food and Rural Affairs (Defra). It has faced criticism from the likes of the British Meat Processors Association.
Additional costs for health certification and border charges are affecting companies exporting their produce to the UK from the EU and also UK food producers importing ingredients.
The larger issue is the relationship between the UK and the EU post-Brexit.
Labour, unlike some smaller parties competing in the General Election, has made no commitment to re-joining the bloc and in its manifesto talked about international trade more broadly.
“We will publish a trade strategy and use every lever available to get UK business the access it needs to international markets. This will promote the highest standards when it comes to food production,” Labour said.
It added: “We will lead international discussions to modernise trade rules and agreements so they work for Britain, promoting deeper trade and co-operation, including through the World Trade Organisation and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.”
Labour also said it will seek a new strategic partnership with India, including a free trade agreement.
The thinktank UK in a Changing Europe said it was disappointed that Labour has not committed to re-thinking Brexit.
Joël Reland, a senior researcher at the organisation, said: “Labour has maintained a studied silence on Brexit in this election campaign, but if elected it will have to face up to some hard choices. Avoiding deals which involve alignment with the EU rules is the politically safer option, but this could well undermine its attempts to boost economic growth.”
Mark Lynch, a partner at London corporate finance house Oghma Partners, said: “It’s a shame that Labour haven’t followed the Liberal Democrats further and committed to re-joining the single market as a longer-term goal. If we are to deliver the best chance of accelerating GDP growth in the UK, rejoining the single market would be a helpful step forward in my view. Let’s hope the next government’s more sensible approach to trade, in relation to the food industry at least, is implemented quickly.”
Forging links with the EU
But Lynch applauded Labour’s commitment to re-joining the EU Veterinary and Phytosanitary regime.
“It looks like the Labour Party has also listened to the food Industry. Tucked away towards the back of the manifesto there is a commitment to ‘seek to negotiate a veterinary agreement to prevent unnecessary border checks and help tackle the cost of food’ – this is great news for the food industry and consumers, particularly for the smaller food exporters who have been particularly hard hit by Brexit related issues,” he said.
Addy at the PTF says: “Government should do all it can to work with and support the food industry in developing two-way trade without unnecessary barriers that benefits domestic producers and consumers and essential international suppliers. To this end, PTF supports the aim of forging closer links with the EU, our nearest and largest trading partner [and] exploring the potential of a vet agreement.
“Government must ensure the high-quality imports necessary to maintain food security are kept flowing too and that barriers to importing do not deter fair trade in necessary supplies to the UK.”
Help for small companies
Labour said it will take action on late payments to ensure small businesses and the self-employed are paid on time.
“We will improve guidance and remove barriers to exporting for small businesses,” it said.
Addy liked this announcement. “Tackling late payment to improve cash flow and removing barriers to export must be essential elements for food and drink SMEs.”
Tina McKenzie, policy chair of the Federation of Small Businesses (FSB), agrees. “It’s good to see Labour’s clear manifesto commitment to deliver its small business plan in government and that it recognises the crucial importance of the UK’s small firms and the self-employed.
“Pledges to reform business rates, legislate to tackle late payments by big businesses to their smaller suppliers and remove barriers for small business exporters are welcome proposals and FSB has been working on a cross-party basis to secure action on these crucial policy issues.”
Nicholls at UKHospitality is also supportive of the party’s business rate reform plans.
“Hospitality pays three times its fair share of rates, as a proportion of its turnover, and lowering the burden can easily be delivered within the first 100 days of an incoming government through the introduction of a permanently lower rate for hospitality and other High Street businesses.”
Labour’s manifesto pledge to make sure the National Living Wage is a “genuine living wage” by ensuring it accounts for the cost of living, received “broad agreement” from the PTF but Addy adds the caveat that “allowance should be made for the fact that increasing wages has a considerable impact on profit and therefore capital investment of businesses”.
“This is particularly true of sectors that historically have relied on lower-paid workers,” Addy says. “Food industry margins are often slim, so increasing wages will slow down investment in other areas.”
Looking for growth
More generally on the manifesto, Shore Capital’s Black says “Growth is the key mantra of Labour, and for good reason, as the national debt and tax take are at high levels”.
He adds: “[Former Prime Minister] Liz Truss’ experience with the gilt and currency markets will be at the forefront of shadow chancellor Rachel Reeves’ mind, so the ongoing key tax commitments, including no change to corporation tax.
“All this means that growth will need to emerge from more than stability and here any industrial policy that emerges will be significant, or otherwise. In this respect, there is not yet an appreciation of the growth potential of the largest industrial system in these isles; that of food.
“Numerous policy questions need an integrated approach around soil, carbon and sustainability, animal welfare and biodiversity, skills, food safety and security, trade policy, and health and well-being. Such a system, such opportunities, that should embrace the UK’s world-class research institutes, need coordination that does not exist in Whitehall, hence, my call for a Minister of the Food System to drive domestic food production in the right way, increase public procurement of British food, and create the basis for the UK to be an intellectual powerhouse of future food systems.”
He adds: “The UK food industry, not just farm, but farm to fork, needs to be at the heart of government, with the trade unions, the environmentalists, the health professionals and medical profession, to curate a strategy for material growth, which if encountered and embodied, and part of a multi-sector strategy of industrial policy, could make this a very successful Labour government.”
