Food and Drink: UK Economy

Dan Poulter Excerpts

Wednesday 1st December 2021 Westminster Hall

[John Stevenson]

I very much agree with my hon. Friend; it is about striking a balance between the two. Clearly, at this moment in time there is a shortage of labour, and the industry needs to secure that labour if at all possible. However, I think the industry itself would accept that driving productivity is equally important, and that through productivity it can quite often end up needing fewer employees while being a much more productive sector. My hon. Friend will know from our visits to factories that the food and drink sector is an incredibly innovative and productive sector overall. It is therefore vital that industry and Government work together, so I would be interested to know what actions the Government are taking on the issues I have already mentioned.

As I have already said, the food and drink sector is a hugely important part of our economy. It employs a large number of people and contributes significantly to our economy, but there is the danger that the Government add more and more cost and regulation, which endangers its success. A small but significant example is the definition of “small and medium-sized enterprise” in the Health and Social Care Bill, which could have a huge impact on UK businesses and give a competitive advantage to foreign competition.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

I congratulate my hon. Friend on securing the debate. One area in which I am sure much of the UK food and drink industry would welcome greater support from Government is that of honest food labelling. As it stands, food could be farmed in Argentina or elsewhere overseas, but packaged in the UK and still labelled as UK produce. Does he agree that the Government need to look at that area, so that we can back British farmers and British food producers more effectively and make sure we have informed consumers who can back our food producers in the shops?

[John Stevenson]

My hon. Friend makes a valid point. Interestingly, food labelling could potentially give us an advantage as a country when selling those products: the UK label, the Union Jack, has great resonance with many overseas consumers as well as our own domestic consumers.

On the cost and regulatory side, we also have the prospect of the extended producer responsibility. The sentiment behind it may be sensible, but the additional cost to the industry will potentially have serious consequences. Have the Government fully thought through the very real cost implications? I appreciate that the relevant primary legislation, the Environment Act 2021, has already passed, but it is the secondary legislation that will determine the detail. As the Minister will know, the industry is concerned about the scope, timescale and implementation of those regulations. It believes that the costs have already risen and could reach £2.7 billion for the industry, which will inevitably be passed on to the consumer. Indeed, it is estimated that each household will face a £75 increase in its annual food bill. Is that something that the Government are happy with? If not, will they work with the industry—particularly, as I have already mentioned, the FDF—to ensure that the regulation and costs are proportionate, and that the industry can absorb them without losing its competitiveness? If it cannot, there is a real danger that the regulations could backfire and be detrimental to an important sector of our economy.

In conclusion, I look forward to hearing from the Minister on the specific points I have raised. I look forward to her comments on how she intends to properly and fully support what is one of the unsung successful sectors of our country, but also one of the most important, as has been conclusively demonstrated during the pandemic through the industry’s performance in making sure that we continue to be fed at a very difficult time. I also hope that the Minister and her Department will fully recognise the importance of this sector, celebrate its successes, and truly be a champion of the industry.