UK’s exit from the EU is biggest single challenge industry faces, FDF director general tells inaugural Convention

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Today, the Food and Drink Federation’s first ever FDF Convention is being held at Willis Towers Watson. Speakers will hail from Nestlé, Spar UK, Tesco, Mars UK, Mondeléz International, Coca-Cola GB, Weetabix, Agrico, HSBC, McCain Foods, Seabrook Crisps, and Kantar Worldpanel. Environment Secretary Liz Truss will also address delegates. In the opening address, Ian Wright, FDF director general, said:

“Good morning. May I add my welcome to that of Fiona [Dame Fiona Kendrick, CEO of Nestlé UK and FDF president,] .It is a great pleasure to see you all here. This is our first Convention and is an exciting development for us, showcasing as it does the industry and the big issues we face.

“Of course, the biggest single challenge our industry faces is the UK’s exit from the EU. Indeed, this is probably the UK’s most significant peacetime challenge ever.

“Last week both the Chancellor and I agreed with the Governor of the Bank of England that the country has taken a decision which adds to the economic risks to economic stability and growth.

“The consequences of that decision represent a series of major challenges for both the Government and our industry. We will all have to deal with those in our personal lives. FDF now has the considerable duty to guide the industry through those challenges successfully.

“The first is that the uncertainty is all-embracing. It is clear that the Remain campaign had no ‘plan B’; while the Leave campaign had no plan at all.

“The focus of the Government was on winning over the public and not on contingency.

“The Civil Service is only now working out how it will tackle the big issues it faces.

“It a long way from providing route maps to solutions and even further from the solutions themselves.

“Most worryingly, I, like Professor Tim Lang, suspect successive cuts to staff have left it under-resourced for the tasks in hand.

“It is clear that while business desperately needs to know the direction of travel on policy, we’re not going to get it until perhaps October.

“And it’s clear, as we face up to the need for a completely new trading environment for our industry, that it is up to US to inform its design and implementation.

“It may be that business was too silent, too trusting – maybe even too complacent – in the run-up to the referendum.  That’s now a stale debate.  But we cannot afford to be quiet, cautious or reactive in the weeks and months ahead.

“We must ensure that those entrusted with negotiating our exit from the EU do so armed with the very clearest instructions from the food and drink industry as to what we need.

“Nothing must be assumed or taken for granted.

“I have a high regard for many individual ministers and shadow ministers – not least Liz Truss who’ll be with us later this morning and has been a strong advocate of this industry (and I hope will continue to be so in whatever role she may have) – I have to say that we cannot expect a deep understanding of business from politicians.

“So industry needs to be more active and more vocal to make sure our representatives in Government understand our concerns and can represent our interests and those of our workforce.

“These areas stand out as crucial.

“Today we outline our manifesto for food and drink in the post-referendum era setting out the FDF priorities for action over that period.

“We begin today a brisk consultative exercise with you and all of our members to inform our work going forward. Nothing has a higher priority.

“This is how the emerging agenda is looking.

“First. Access to the Single Market and customs union.

“The ability to trade, unimpeded by tariffs and with the minimum of bureaucracy, right across the 27 other EU nations is at the heart of the UK’s competitiveness.

“I was enormously heartened to hear Business Secretary Sajid Javid say last week, at his business leaders’ roundtable meeting, that the Single Market was his top priority.

“The EU is the UK’s largest market for exports of food and non-alcoholic drink.

“Many manufacturers would struggle to substitute existing EU customers for ones in other parts of the world –  including emerging markets – because of differing consumer tastes and limited product shelf lives.

“Second. Access to the favourable trading terms with third countries that the EU has secured.

“We will insist on continued access to the Free Trade Agreements that the EU has secured with 53 countries without need for renegotiation.

“Third. Access to labour.

“Of the nearly 400,000 people employed in UK food and drink manufacturing, nearly one quarter are from EU countries outside the UK, and many of them are from the recently-joined counties of Eastern Europe.

“The immediate priority for those workers is to support them through this deeply unpleasant climate of ‘anti-foreigner’ sentiment and to provide them with speedy reassurance that their future here is absolutely secure and their contribution is valued and warmly welcomed.

“In the medium term, our industry will require cast-iron assurances that their access to a flexible workforce, with a wide range of skills and capabilities as well as a strong work ethic, will continue.

“Our industry will need 130,000 new skilled workers by 2024.

“FDF has already taken steps to ensure the UK develops more home-grown talent, especially skilled food engineers and scientists, through ambitious graduate and apprenticeship programmes.

“However, workers from other EU Member States will continue to provide a highly valued solution in helping to close the skills gap.

“The Government must therefore develop a new migration policy that ensures manufacturers will have continued access to the workers we need to address a looming skills gap – and the drive for future innovation to support the UK’s competitive advantage.

“We believe the best way of achieving this is to retain the free movement of labour without disincentives for people coming to the UK to work.

“This would help to ensure continued rapid transfer of expert knowledge to the UK which helps to build the skills level in the UK’s workforce.

“Fourth. Productivity.

“Fiona has already talked about the urgent and important need to make our industry more productive.

“She has personally championed this cause and led our industry’s thinking and I think one of many great shames of the circumstances we find ourselves in is that her work on productivity for the food and drink sector – and Charlie Mayfield’s for industry more widely – have been somewhat overshadowed.

“It is very encouraging that Sajid Javid has made clear that the Government will give this great priority in the days ahead.

“For our part, the FDF will ensure that we leverage all the good work done so far which will be central to helping our members – particularly the smaller and medium sized businesses – to access best practice on boosting their output.

“Fifth is regulatory stability.

“As I said, we must have a roadmap for future UK food legislation so that businesses can see how Government will manage the exit process in the complex area of food legislation.

“Businesses also need to know how ongoing legislative discussions on food safety, quality and labelling will be affected.

“It is vital that Government puts in place a mechanism to ensure ongoing dialogue with industry, including discussion of scenarios for the future regulation of UK food and drink.

“Technical issues need to be discussed with affected businesses to ensure an effective regulatory landscape is developed as part of the exit process.

“We will also highlight the need to maintain confidence in UK food and drink: recognition of the UK as a producer of safe, high quality food and drink should not be harmed by the UK’s withdrawal from the EU.

“All current and ‘in the pipeline’ regulations, whether on food safety, labelling or on broader issues such as health and safety, will apply to UK business until the day we exit, at least.

“Industry will need reassurances that mechanisms will be put in place to ensure mutual recognition of potentially different regulatory systems.

“Sixth. A requirement shared right across UK industry:  a call for government action to provide certainty, reduce burdens on business and help boost competitiveness.

“We are in no doubt of the scale of economic risk that the Brexit vote brings with it. The Chancellor and the Governor spelled that out last week; the Foreign Secretary confirmed it yesterday.

“Business leaders of course have an obligation to choose their language carefully and not to put already fragile confidence under further pressure.

“But government, too, has an obligation to act quickly to support confidence and competitiveness – and to provide reassurance and stability.

“So I believe implementation of the proposed Apprenticeships Levy and the Sugar Levy – and any other fresh burdens – should both now be put on hold.

“We have raised serious questions about both policies. Both would, if proceeded with in their current form, add unwelcome additional burdens on hard-pressed industry at a moment of crisis.

“The Apprenticeship Levy is not yet properly developed and not yet ready for implementation.  The concerns of business have not been acted upon.

“And it seems to me inconceivable that the small number of civil servants with expertise in excise duties within HMRC would, at this time, be working on the sugar levy and not on the replacement for the customs union.

“And so I return to where I started: leadership.

“The majority of FDF members wanted us to remain in the EU and will be enormously disappointed by this unwelcome turn of events.  But we are where we are.

“I am clear that strong and capable leadership from FDF will be essential to support our members – and the industry more widely – if we are all to navigate our way through the weeks and months of profound uncertainty that lie ahead.

“That leadership, of course, includes the importance of keeping recent developments in proper proportion.

“While the post-referendum trading environment is a massive challenge for the food and drink industry, it is not the only challenge.

“The work of FDF, whether on food safety and science, or on sustainability goes on.

“We continue, even among all this uncertainty, to plan for publication of the Childhood Obesity Strategy.

“Whenever it comes, we will be there to support our members and promote the industry’s excellent work around health and wellbeing.

“We continue to make the case in private and through the media for it being an holistic and balanced piece of work based on evidence not supposition.

“We continue to oppose the sugar levy which is not evidence-based and will not be in the least bit effective.

“We continue to engage with our wider stakeholders as we did only last night at our Parliamentary Reception, where our focus was on productivity.

“But with the emergence of this huge new challenge our mission at FDF is very clear to me:  to be by far the most credible source of the best quality advice, intelligence and advocacy in our industry.

“And to be a clear, trusted and persuasive voice on behalf of the UK’s great food and drink manufacturing industry.

“There is no more urgent task and I can promise you that FDF will step up to the plate.”