Dealing with Brexit and its consequences is likely to occupy a good deal of “run-time” for government and for Parliament over years ahead.
Once outside the EU, the UK will need to develop new policy frameworks in many areas relevant to grocery businesses, including:
- Labour / migration
With the Conservatives in government, supported by a majority in the Commons, we may use the Conservative manifesto as a guide to how policy may evolve in future.
The general strategic approach taken by Mr Cameron, Mrs May and Mr Johnson over recent years is not expected to change greatly. The party remains committed to ideas like:
- Devolution of power
- Improving productivity
- Incentivising R&D, especially in life sciences, clean energy, space, design, computing, AI and robotics
- Investing in infrastructure (data and physical)
Perhaps the key change is a somewhat more liberal approach to fiscal policy. Some spending increases are promised, without increases in personal taxation (p 15, the so-called “triple tax lock”).
The Conservative manifesto is less generous than the Liberal or Labour offerings but, even so, the IFS has questioned whether it can be delivered.
Migration and labour policy is critical to UK grocery businesses, given their reliance on migrant workers in every part of the supply chain.
Post Brexit policy is covered in pages 20-21 of the manifesto, which gives some idea of what post-Brexit immigration policy would look like.
It promises an Australian-style “points-based” approach. This will apply to EU and non-EU citizens equally. To be eligible, potential migrants must:
- Speak English well
- Be a good citizen in the home country, no criminal record
- Have high qualifications
- Have a definite job offer
There will be no access to UK benefits for EU citizens until they have been in the UK 5 years (as with non-EU citizens now).
Significantly the summary given in the manifesto does not mention wage levels as a qualification for coming to the UK to work – this was previously part of the Conservative agenda on this issue. The requirement for “high-skills” remains in-place, however.
Research by You Gov suggests that citizens are largely cynical regarding the deliverability of all the party manifestos. Only 27% think that Conservative policies are “thought-through”.
The Conservative manifesto is shorter than the Liberal and Labour versions, but still ambitious. Key policies likely to impact the food and grocery industry specifically include:
- Improve hospital food (p 11)
- Eliminate san-pro tax (p 16)
- Lower business rates for retailers (p 32)
- New agricultural policy, with farm subsidies based on farmers delivering public goods (p 42)
- Funding for farming to be held at current level for whole life of Parliament (p 42)
- Legal requirement to fish and farm sustainably (p 42)
- UK government bodies to “buy British” where possible, when sourcing food (p 42)
- Expansion of current Seasonal Agricultural Workers Scheme from 2,500 to 10,000 per year (p 42)
- New plastic levy (p 43)
- New deposit / return scheme for plastic and glass (p 43)
- Full UK control of fisheries by Dec 2020 (p 46)
- Alcohol duty review (p 46)
- Animal sentience (p 54)
What this means for grocery businesses:
- Businesses should anticipate change in the legal / fiscal operating environment in years ahead, with multiple events occurring simultaneously. This will be a major test of management capability.
- For many businesses, migration and labour policy will be critical. Construction of the planned “points-based” system will determine labour cost and availability in future. Businesses should pay close attention to this and, if possible, participate in development.
- The structure of UK agriculture has been shaped over many years by EU agricultural policy, especially subsidy schemes. The new UK-only scheme(s) will presumably have similar impact, with implications for businesses that buy British farm produce.