5 July 2016
FDF Convention 2016: FDF Director General's speech
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.
Ian Wright CBE, Director General, said:
Good morning. May I add my welcome to that of Fiona.
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.
More information
Contact FDF Press Office for further information via 0207 420 7131 / [email protected]
This toolkit contains a selection of information on the UK’s future relationship
with the EU for UK food and drink manufacturers.