The UK has a new government: How will food and beverage be impacted?
It’s official. After 14 years of Conservative rule, the United Kingdom has a new government. The Labour win, officially announced by the BBC at 4:59am on the 5th of July, sees a political shift from the right-wing, over to the left.
So, what does the new Labour government, and its leader, Prime Minister Keir Starmer, mean for the food and beverage industry in the UK, and how will it affect international trade?
How will the new Labour government impact the food and beverage industry?
The Labour campaign has focussed on ‘kickstarting economic growth’, a pledge that will certainly come as welcome news for all areas of industry, following struggles resulting from economic and political instability over the past decade. Now that it's been elected, the new government must deliver on this promise. What are the main ways the new government is planning to kickstart economic growth?
Food and beverage legislation: The new government has made some very specific pledges, with regards to the food and beverage industry. One of these being the clampdown on foods high in fat, sugar and salt (HFSS).
While Prime Minister Starmer has ruled out imposing a tax on HFSS foods, he has promised to ban the advertising of ‘harmful’ junk food and sugary snacks to children.
“We will change advertising rules and we will make sure that products which are harmful to our children’s health: vaping, junk food, sugary snacks, cannot be advertised to our children,” he said during a speech prior to the election, on plans for the National Health Service.
The new government has also pledged to ban the sale of energy drinks to under 16s.
“Dangerously high caffeinated energy drinks containing over 150mg of caffeine per litre will be banned from sale in retail outlets and online to under 16s, as it has become clear to health and education experts that the current caffeine labelling system is failing to prevent young children from purchasing these drinks,” said a spokesperson for the Labour Party as part of the Child Health Action Plan, published in June.
Back British farmers: The new Labour government has been keen to highlight its commitment to British farming throughout its election campaign. The new Prime Minister spoke of a big focus on safeguarding food security during his address to the National Union of Farmers (NFU) in February. He also stressed the importance of food security as part of the UK’s national security. During this speech, he announced that the Labour government would set a minimum target for 50% of food consumed in the UK to also be produced in the UK.
The Prime Minister also pledged to address labour shortages in the farming industry, saying that, "the seasonal nature of farm work makes it unique and that the seasonal worker route is a distinctive solution to a distinctive challenge." However, he made it clear that a return to free movement throughout Europe was not currently an option.
Prime Minister Starmer has also announced plans to promote sustainability through land use, with the introduction of a land-use framework and make environment land management schemes work for farmers and nature.
In response to the Labour manifesto, Tom Bradshaw, President of the NFU said, “it’s clear that our constructive and open lobbying on many areas has been listened to.”
Business taxation: Labour has pledged to cap corporation tax at the current level of 25%, the lowest in the G7. It's also promising to keep UK businesses competitive by making changes to tax levels if other countries move to undercut.
Boost British industry: The new government is planning to boost British industry through investment. The new industrial strategy will be run by the soon-to-be established Industrial Strategy Council. This is all part of what the government calls the ‘pro-business environment’ that it intends to create, with a focus on supporting innovation, investment, and high-quality jobs.
Reduce business costs: The government has pledged to enact its ten-year infrastructure strategy. This strategy will prioritise the building of new roads, railways, reservoirs, and other nationally significant infrastructure in order to streamline supply chains.
It has also pledged to make Britain a ‘clean energy superpower’ as a means to not only become more sustainable, but also more self-reliant in terms of energy usage. This would also make energy significantly more affordable to businesses and private citizens.
Support small businesses: Labour’s plan for economic growth has been developed for all UK businesses, but small firms and entrepreneurs face unique challenges. Labour has therefore pledged to support small businesses. And the biggest part of this plan? To remove barriers to exporting for small businesses. Proposed reforms of the British Business Bank, including a stronger mandate to support growth in the regions and nations, is also designed to make it easier for small and medium sized enterprises to access capital.
Drive innovation: The Labour Party has been campaigning heavily on the idea of British innovation and the support of British ideas. Through this it hopes to deliver growth and raise productivity. It's also pledging to make Britain, ‘the best place to start and grow a business’.
How will the new Labour government affect international trade?
While the new government has made it very clear that there will be no return to the single market, the customs union, or freedom of movement, it has committed to working to improve the UK’s trade and investment relationship with the EU. This will be achieved, the government says, ‘by tearing down unnecessary barriers to trade’. The plan, as outlined in the Labour Party’s manifesto, will be to seek a veterinary agreement, to prevent unnecessary border checks and help tackle the cost of food.
It has also pledged to look again at the impact of trade deals with countries such as Australia and New Zealand.
In short, the new Labour government has made big promises to the British electorate. Now it’s time to follow through on those promises. The weight of history is on your shoulders, Prime Minister Starmer, and we’ll be watching.
