Food and Drink: UK Economy

Greg Knight Excerpts

Wednesday 1st December 2021 Westminster Hall

[John Stevenson (Carlisle) (Con)]

I beg to move,

That this House has considered the contribution of food and drink to the UK economy.

It is a pleasure to serve under your chairmanship, Mr Davies. I am delighted that we have the opportunity to debate the importance of the food and drink sector for the UK economy. I also mention that I am the chair of the all-party parliamentary group for food and drink manufacturing.

During the pandemic, we rightly clapped and acknowledged the work and dedication of the medical staff, who did so much for the many people affected by covid. We rightly recognised the commitment of those who continued to work in supermarkets and the many drivers who ensured that the deliveries actually got through. However, there were many other unsung heroes in many different industries and sectors who also helped to ensure that our society continued to function and that life continued in a manageable way.

One such group was the food and drink manufacturing sector. Hon. Members may recall that, at the beginning of the crisis, there was some concern that our food shelves could become empty or the supply of food would be greatly reduced. The adage is that if there was no food available, it would not be long before there was a major crisis, panic buying and potentially something rather worse. That did not happen. Indeed, the factories, sometimes in very difficult circumstances, continued to produce the food and drink that we as a country needed. The deliveries continued to be made, the supermarkets were supplied, the shelves remained full and families continued to shop in the knowledge that there would be food to buy.

There was no panic buying, except—interestingly enough—of toilet roll and pasta, which to this day I do not understand. Nevertheless, that did seem to be something that exercised many people up and down the country, but even that was short-lived. We therefore have a lot to thank the food and drink sector for and, very importantly, all those who work in it. At the time, there was some recognition of their work, and clearly there was a greater awareness of the importance of the food and drink sector, of the vital need to ensure the supply of foods to shops, and of the overall significance of the sector to our society. In many respects, that awareness has sadly disappeared. I believe this is extremely unfortunate. We should be far more aware of the nature of the sector, how important it is, its many strengths, and also its weaknesses. This is about not just the basics in life, such as the supply of food, although that is extremely important, but the real and substantial contribution that the sector makes to our economy, both nationally and locally.

I have a few statistics and facts about the sector. The food and drink sector is the largest manufacturing sector in the United Kingdom. I am amazed at the number of people who are surprised by that. They often think that pharmaceutical, automobile or aerospace would be the largest manufacturing sector, but in reality the food and drink sector is our leading manufacturer.

It has a turnover of more than £104 billion, representing 20% of all UK manufacturing. It contributes over £29 billion to the economy, and directly employs over 440,000 people and thousands more indirectly. Think of the many brands, a large number of which are iconic and international—the very best of British products. Exports exceed £23 billion, going to more than 220 countries and territories, with a huge potential for much more.

We should also be aware of the contribution the sector makes to the local economy. It is often a substantial local employer, which has a significant impact on the performance and growth of local economies, and offers employment and training opportunities to local people.

My constituency of Carlisle is a prime example. Nestlé employs 400 people. It is the largest food and drink company in the world, a significant exporter and a purchaser of much of the milk that is produced by local farmers. The 2 Sisters Food Group employs nearly 1,400 people, and if I were to have a ready-made meal from Marks & Spencer, it would probably have been produced in the factory in Carlisle. McVitie’s, part of Pladis Global, employs nearly 800 people. Talking of brands, Carlisle produces the iconic Carr’s water biscuits and, of course, 6 million custard creams every single day.

These businesses make a huge contribution to the Carlisle economy and the wider regional economy. Think of the spending impact that 2,500 directly employed staff have on the local economy, and those are just the larger employers, as these figures do not include the many smaller businesses.

Indeed, the sector as a whole is incredibly diverse, with over 10,000 manufacturing businesses, most of which are small and medium-sized enterprises. In reality, there are very few large players, which can be both a strength and a weakness for the sector. It means it is a dynamic sector, with much innovation, but at times it also means that the voice of the sector is not heard as much as it should be.

[Sir Greg Knight (East Yorkshire) (Con)]

I congratulate my hon. Friend on securing this important debate. He is making some very interesting points, but does he agree that one of the problems the sector has had in recent times is labour shortages? They do not just affect the retail end of the sector, but the farm gate, with many pig farmers, for example, suffering from a lack of qualified abattoir workmen. Is this not something that needs to be addressed?

[John Stevenson]

My right hon. Friend is absolutely right. Indeed, I will come to that later in my speech, but he has picked up one of the key issues that relates to the sector at the moment, and that extends beyond the food and drink sector, which I fully acknowledge.

The sector can be dynamic, but sometimes the voice of the sector is not heard as much as it should be. This can be a drawback, and something of which the Government should be acutely aware. Just because it does not have the loudest voice, is not the most glamorous sector and does not have a few substantial players with easy access to Government, it is still vital that the industry’s concerns are heard at the very highest level of Government.

I have talked about the economic importance, but I am fully aware of the health issues surrounding this sector as well. I appreciate that we, as a society, have become concerned about obesity and health, and rightly so. To be fair, the industry gets this and is aware of the criticism that is often directed, rightly or wrongly, at them, partly because of their products. However, the issues do not wholly lie with the industry. Indeed, the industry has made huge strides in producing many new products that are healthier and reformulating existing products, and substantial reductions in salt and sugar have helped to improve many of the products.

New products that have been brought to the market often reflect consumers’ interest in these healthier products. I must, therefore, question just how useful schedule 17 to the recent Health and Care Bill will be. The industry is already working hard to improve its products, it co-operates fully with the Government and is receptive to change. However, as a society, we must be realistic and look for other solutions to obesity concerns. We cannot and should not overlook our personal and parental responsibilities. I suspect that the provisions of schedule 17 are unlikely to produce any real improvement, as some people anticipate.

The purpose of this debate is primarily to raise awareness of and the success of the food and drink manufacturing sector, its contribution to our country, what the Government can do to support it, and the challenges it faces in future.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

Thank you, Mr Davies, for letting me speak. I too thank the hon. Member for Carlisle (John Stevenson) for setting the scene on a subject that every one of us takes a great interest in. I am pleased to see the shadow Minister, the hon. Member for Cambridge (Daniel Zeichner), in his place. I am also pleased to see the Minister back in Westminster Hall; we seem to be here quite often—this is two days in a row—but, again, this is something we are both interested in. I was intrigued by the introduction from the hon. Member for Carlisle. He mentioned some of the products. I have to say that, in my house, not just for me but for my grandchildren, custard creams are top of the tree when it comes to biscuits. I usually dunk them in tea, but the children just eat them by the score. The more packets I bring in, the more they eat, so I think we are keeping the custard cream sector going in my constituency.

There has been much emphasis today on the creation of a more resilient food and drink system across the United Kingdom, especially after the consequences of the pandemic. The hospitality in particular sector has suffered incredible financial and personal losses. I know that that is nobody’s fault, by the way. It is not the Government’s fault; it was the pandemic, and the changes that it made, but it has affected the food and drink sector, especially the EU-UK economy.

In addition to the pandemic, other factors have had a negative impact on the food and drink industry, such as Brexit. The Northern Ireland protocol has had an horrendous impact on us in trying to get our products out and back in again. Our biggest trading partner is the UK mainland. The UK Food and Drink Federation says that the UK has lost over £2 billion in sales. We have been proven to be heavily reliant on the EU in the past in relation to food and drink; 28% of our food supplies come from the EU, and the UK’s ratio of food production to supply has dropped by 10% since the 1990s.

Northern Ireland food and drink is worth £5 billion per year. In 2019, just before the pandemic came in at the end of the year, we had an increase in Northern Ireland of 4% on the year before, to £5.77 billion, and some 25,000 jobs. Therefore, when it comes to the Northern Ireland economy, and particularly that of my constituency, the food and drink sector is massively important.

The UK food and drink sector involves 440,000 people, has a turnover of £104 billion and accounts for 20% of total UK manufacturing. I know that the Minister is well aware of the Red Tractor labelling, which was a proactive move by the Government that I was happy to support. I always like to see the Union flag on labels, not just because I am a Unionist but because it is my country and I am proud of it. I am proud of my Union flag and want to see it shown wherever it can be. We must, however, set some goals for the hospitality sector to regain what has been lost in the past year.

In 2019, UK food and drink exports exceeded all expectations, going to 220 countries worldwide. That was truly brilliant in trade. We should be proud of what we have done and, now that we are out of the EU, look to where that extra business is going to happen. In Northern Ireland, Brexit and the pandemic have led to a greater focus in the industry to ensure that, if something similar happened, we would be in a better position to respond. I believe that we can do so.

[Sir Greg Knight]

Does the hon. Member agree that, now that we are out of the EU, we can properly address issues such as deficiencies in food labelling?

[Jim Shannon]

I absolutely agree with the right hon. Gentleman. We are in a better position for that to happen.

A more localised approach to food production would be beneficial to our systems. On how we can do it better together here and in Northern Ireland, Scotland and Wales, Mash Direct, a company in my constituency, does significant work in the Strangford community and beyond, delivering to the UK mainland, the EU and the middle east.

I want to give right hon. and hon. Members a culinary experience of Strangford. We are lucky to have Lakeland Dairies, which produces some of the best milk in the world because the grass is sweeter—the Park Plaza hotel just across the way has its wee milk sachets to go in a coffee, so they have made it here. For the main course, there is the beef, lamb, pork or chicken from my constituency. It is not just that—alongside, you can have Mash Direct’s products, Willowbrook Foods’ products and Rich Sauces. You can have Portavogie prawns and Comber potatoes, which are both protected under the EU, and you can finish the meal with Glastry Farm ice cream. That is another company in my constituency that has done extremely well in food and drink. Then there is Rademon gin and Echlinville whiskey, local beers and all the cheeses you can have to finish up. Right hon. and hon. Members who want a culinary experience should come to Strangford because it has got everything. They could not go to any better place for a restaurant or a menu. All those things are in my constituency.

The importance of the hospitality sector goes beyond turnover. Our exports make a key contribution to overall industry growth. Greater understanding of industry performance often depends on Government reporting. I am confident that the Minister well understands the importance of that for us in Strangford and indeed for the whole of the United Kingdom.

Let us see all regions of the United Kingdom of Great Britain and Northern Ireland work and sell together across the world. I believe that the world is our oyster for selling things now that Brexit has been undertaken. Perhaps it is not entirely the same for us in Northern Ireland as it is for the rest of the UK, but we hope that we will shortly overcome that. We should grasp the opportunities for food and drink sales with both hands.