Food and Drink Federation welcomes support but warns of key challenges ahead

The UK’s Food and Drink Federation has welcomed government support for the sector amid the coronavirus pandemic, but has warned greater assistance will be needed for hard-hit businesses. Neill Barston reports.

According to Ian Wright CBE (pictured), the organisation’s chief executive, the shutdown of the economy over the past three months has especially affected young people in industry, with many either being furloughed or suffering loss of employment.

UK Chancellor Rishi Sunak revealed in a summer financial statement on Wednesday that there would be a further £30 billion in support packages to help the British economy through the crisis, which came on top of £158.7 billion that had already been spent on tackling the unprecedented conditions.

As economists have noted, the country is facing a severe recession for the remainder of the year, with the Financial Times stating public debt has exceeded the size of the national economy for the first time since 1963.

Furthermore, the prospect of Brexit has caused further uncertainty, with considerable financial complications arising from a major period of structural re-organisation as the country seeks new trading arrangements with the EU and seeks to create replacement deals with other nations, that it had previously been a part of within the European trading block.

“The FDF is extremely appreciative of the unprecedented support the UK Government and the devolved administrations have provided throughout this crisis. Up and down the country, the ‘Hidden Heroes’ of the UK’s food and drink industry have kept the nation fed through the last few difficult months, said Wright.

He added: “The UK’s food and drink manufacturers who supply into the hospitality and catering trade have been hard hit by the crisis, as their customers disappeared overnight. These ‘squeezed middle’ firms will enthusiastically welcome the Chancellor’s announcement today to cut VAT on food and hospitality and slash the cost of eating out. We hope these measures will lead to a significant boost in demand for the hundreds of manufacturers who supply into hospitality and the out of home sectors and help them to manage increased supply costs.

“However, if demand does not return quickly, these firms will continue to struggle unless they – and the sector they supply – receive additional employment support. The Chancellor must therefore keep the option of extending full furlough support to hospitality and their food and drink suppliers in his back pocket so we do not lose vital jobs and businesses.

“The closure of hospitality has disproportionately affected young people’s employment prospects. We applaud today’s interventions to increase employment opportunities for young people who would otherwise be hit hardest by unemployment. The FDF is pleased that government heeded our call to introduce cash incentives for employers taking on new apprentices. We would now welcome the opportunity to work with government to ensure food and drink manufacturers can make the most of the schemes announced, as our industry offers great careers, in every constituency.”

Meanwhile, Stephen Phipson, Chief Executive of manufacturing trade association Make UK, said that industry applauded ‘the bold intent’ of the Chancellor in attempting to kick-start the economy.

He noted that many businesses within manufacturing, including those operating within the food and drink sector, were already at the forefront of a new digital era, adding that the crisis has shot them forward into a future economy where there will be new jobs which will require new skills.

Phipson said: “The emphasis on protecting jobs which already exist, whilst safeguarding and preparing young people with the skills for future jobs which may not yet have been invented is a strategy that companies will fully support. In particular the funding for Apprenticeships is especially welcome and will help boost employers’ investment in their future workforce.

“This is not the beginning of the end of this crisis, however, but perhaps the end of the beginning as far as the economy is concerned. Moving forward, just as industry has shown how flexible and innovative it can be at a time of national need, then Government will need to be equally flexible and innovative in dealing with the after effects which will undoubtedly require further action at some stage. Manufacturers stand ready to work with Government to do whatever it takes to boost growth and livelihoods across the whole of the UK.”

 

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