Brexit debate

Food sector 'better off in the EU': Liz Truss

A Brexit vote would impact food and drink more than other sectors, warned Liz Truss

Environment secretary Liz Truss has claimed the future success of the UK’s food and drink manufacturing sector hinged on it remaining a part of the EU, in a speech to industry leaders last month.

In an address in advance of last month’s Food and Drink Federation (FDF) annual dinner in London, Truss said: “The decision of [the EU referendum] vote on June 23 will probably have a greater impact on the food and drink industry than it will have on any other part of the UK economy. The food and drink industry exports 40% of all of its products to the EU.”

Truss said trading to the continent would become far more bureaucratic and complicated outside of the EU. She added that UK food exports to other parts of the world, including the US and China, would also prove far more difficult outside the EU.

She noted how dependent UK food and drink manufacturing companies were on workers from other EU countries.

Some commentators have estimated that up to 30% of people working in the UK food and drink sector are overseas nationals – many from other EU Member States.

“I think we’ve got huge potential as an industry; let’s get through June 23 on the right side of the argument,” she urged.

The environment secretary also urged food and drink manufacturers to promote the benefits of EU membership to their workforce.

FDF president Dame Fiona Kendrick, chairman and chief executive of Nestlé UK and Ireland, described Truss’s comments as “powerful”. However, she later went on to remind dinner guests what a “very challenging” time the past year had been, with greater scrutiny on the sector than ever before.

Challenge for the sector

Kendrick pointed to the government’s introduction of new initiatives, such as its announcement of plans to introduce a soft drinks tax, as a challenge for the sector.

“We have always accepted that the food and drink industry not only has a role to play in tackling the obesity issue but also has a responsibility to show real leadership here,” said Kendrick.

She then went on to describe the sector’s positive achievements in the healthy reformulation of its products, together with the FDF’s “evidence-based policy interventions” with government and other stakeholders.

Kendrick said the FDF had also engaged positively with the government’s business taskforce set up last year and led by John Lewis chairman Sir Charlie Mayfield, with the remit of identifying how to raise UK business productivity to world-class levels.

“With productivity rightly at the heart of the economic agenda, it’s vital that food and drink manufacturers position themselves as leaders in turning the nation’s productivity around.

‘Turning productivity around’

“This is a long game, and there is much to do, but our vibrant sector has great stories to tell on investment, apprenticeships, technology, innovation and more.

“Long-term successes, such as that of our strong sustainability performance, are what make our industry the national asset that it is. And it is, of course, our skilled and committed people who are at the heart of our sector’s achievements.”

In her presentation, Truss claimed the new Apprenticeship Levy – which comes into force in April next year and will apply to all businesses with a salary bill of more than £3M – presented a big opportunity for food and drink manufacturers.

However, FDF director general Ian Wright criticised the “deeply flawed” way the Apprenticeship Levy was being implemented.

While Wright described the National Living Wage as admirable in concept, he argued that it would have adverse consequences for long-term job creation because of the extra cost burden it imposed on businesses.

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