The industry’s producer body, the NFU was one of the first to give a cautious welcome to the Autumn Statement delivered by the Chancellor but says it expects an announcement on further support for businesses before Christmas.
The Food and Drink Federation chief executive, Karen Betts, said: “We recognise the difficult range of issues the Chancellor had to deal with in today’s Autumn Statement. While there was positive news on tariff suspensions, something we have long called for, food and drink manufacturers would have liked to have seen more measures to help our industry deal with the powerful inflationary pressures we are facing.
“With food and drink inflation now standing at 16.4% and energy costs now accounting for a quarter of food and drink businesses’ operating costs, our sector would have liked to have seen more clarity on future energy support, a plan for working with business to tackle labour shortages, commitments to improve the implementation of the EU trade deal, and regulatory reforms to reduce costs to businesses and to help our sector weather the inflationary crisis while protecting consumers as far as possible from price rises.”
NFU president Minette Batters also felt there was clarity needed: “There is much to be welcomed, particularly on investment in research and development and the roll out of gigabit broadband technology to those hardest to reach rural communities. While we await further clarity, these commitments would enable Britain’s farmers to be more productive and efficient, while continuing to produce sustainable food and achieve ambitious net zero goals.
“Like other businesses, it’s rocketing costs for energy – central to producing our food – as well as huge hikes in feed, and fertiliser, which is putting Britain’s farmers and growers under the most intense pressure. We expect an announcement on future support for businesses before Christmas and it is vital this new targeted approach for business beyond next April includes UK food production and the food supply chain.
“With a safe, affordable domestic food supply being central to our nation’s success, we believe there are robust grounds for the government to classify our industry as a vulnerable sector when it comes to energy provision.
We expect an announcement on future support for businesses before Christmas and it is vital this new targeted approach for business beyond next April includes UK food production and the food supply chain.
“We also heard from the Chancellor today committing that government departments will have their overall budgets increased in real terms. We trust this will allow Defra to deliver a properly-funded Agricultural Transition Plan to ensure Britain’s farmers have the confidence to invest and grow their businesses, in turn, enabling British food, farming and the country to thrive.”
Ross Matthewman, head of policy and campaigns at the Chartered Institute for Environmental Health (CIEH), said: “While CIEH cautiously welcome a number of the announcements made in today’s Autumn Statement, we wish to see greater clarity on some of the key aspects.
“For example, we are delighted to hear that the Chancellor has heeded calls from the CIEH, and others, to significantly increase investment in energy efficiency. CIEH has repeatedly urged the government to increase investment in energy efficiency and welcome the introduction of £6 billion in new funding to that end.
“However, with little clarity on how that money is to be spent, what measures are to be prioritised, and who will form part of the new Energy Efficiency Taskforce, we remain in the dark as to how effective this spending commitment will be. We would welcome the opportunity to work closely with the Government in shaping the delivery of this commitment and will be reaching out to that effect.”
No reassurance for industry
British Frozen Food Federation chief executive, Rupert Ashby, said that the Statement was “disappointing” for businesses in the frozen food industry: “Whilst there was some positive action on business rates over the next five years that should be welcomed, Ministers need to understand the consequences of rising energy prices on businesses in the frozen food industry, which currently provide households across the country with healthy, nutritious, and affordable food.
“Despite representations made to ministers by the BFFF and other bodies, the decision made by the Government not to extend energy support for businesses past the end of March means that skyrocketing costs in the frozen food industry will be passed on to customers in supermarkets, exacerbating the ongoing cost of living crisis.”
He went on to say that the Statement provided “no reassurance that the Government is serious about backing British businesses and, importantly, shows a disregard for food security.”
Ashby added: “The Government must continue to keep the policies announced under close review over the next few months, and Ministers need to understand that if businesses in the frozen food industry are not properly supported, families across the country will have to choose between heating and eating.”
Many of the beneficial measures announced will be undercut by an average rise of 20% in domestic energy bills next year due to a scaling back of the Energy Price Guarantee.
Despite the positive impact of rises in benefits and pensions the elephant in the room remains, according to Rod Addy, director general of the Provision Trade Federation (PTF): “Many of the beneficial measures announced will be undercut by an average rise of 20% in domestic energy bills next year due to a scaling back of the Energy Price Guarantee. Knowing this, consumers will continue to rein in spending at a time of record grocery inflation, which will hit the whole food chain.”
He added that significant rises in bills could be “the last straw” for food businesses with commodity costs across the board still climbing.
