Bulletin: Migration commitments and European elections

General election watch

Chancellor Jeremy Hunt has pledged not to raise Stamp Duty, Capital Gains Tax or the number of Council Tax bands, if the Conservatives were to win the election.

The Conservative party also says that it will cap the number of visas available to migrants. The cap would be reduced over time, guided by advice from the Migration Advisory Committee (MAC).

The Labour party will pass a new law to force government departments to draw up skills improvement plans in high-migration sectors and plans to bring down reliance on migration.

This would be coupled with the aim to revise the existing Apprenticeship Levy to create a Skills & Growth Levy, allowing employers to use up to half of levy funds for non-apprenticeship training.

IGD opinion

The Chancellor’s promise not to increase property taxes would leave the Conservatives little fiscal room to manoeuvre, if they win the election. The latest Office of Budget Responsibility forecasts assume that council tax will rise above inflation for the next five years.

In its current form, the Apprenticeship Levy has had a limited impact to date, with the IFS reporting that employer spending on training has fallen by 27% in real terms since 2011.

Businesses are often frustrated at being unable to unlock training opportunities to support those already in the industry to further develop their skills, with funds left unspent.

The proposed Skills & Growth levy would appear to offer greater flexibility to firms, which would be welcomed by business. Lack of skills is identified as a key economic weakness.

It would also meet one of the recommendations in the recent Independent Review Into Labour Shortages In the Food Supply Chain.

However, it would not in itself, deal with the 50% decline in the number of adults on further education courses since 2010.

Shopper confidence

IGD's Shopper Confidence Index weakened from 3 in April to 1 in May. Food price expectations have risen sharply, with 63% of shoppers believing food prices will become more expensive in the year ahead (compared to 51% last month).

Subscribers to ShopperVista can view the full data and analysis on ShopperVista when the report is released.

IGD Opinion

With the announcement of the election shoppers are being cautious about the coming months.  They are taking a wait and see approach to the election, with any changes likely to take place following the election on 4th July. Big summer events like the European football championship in June may shift consumer sentiment and provide a “feel good factor”.

There remain wide differences in economic experiences and expectations – many shoppers on lower incomes remain under financial pressure.

European elections

Elections are taking place across the European Union for the EU Parliament.  The EU is the UK’ s key trading partner with many food and drink businesses having a connection to Europe – election results and subsequent policy change is likely to have impacts in the UK.