Responding to the Budget delivered by the Chancellor this week, much of the food industry has welcomed continued Government support.
Joint director general at the PTF, Angela Coleshill, told Food Management Today: “Food businesses up and down the country will broadly welcome the Chancellor’s budget announcements.
“Those hardest hit by the impacts of Covid-19, especially in the hospitality and foodservice sectors, will take much comfort from measures such as the extension of the furlough scheme and the new Restart Grant scheme, though these will not directly compensate for the losses already suffered by their suppliers.
“Looking further ahead – and as the industry adjusts to new trading relationships in highly competitive global markets – support for recovery through investment and skills development will be vital to our success. Ensuring a pipeline of future talent through apprenticeship programmes and other skills support will be particularly important for SMEs whose local infrastructure and training provision may not have been able to meet their needs.”
Food and Drink Federation chief executive, Ian Wright CBE, said: “Food and drink manufacturers will welcome this Budget. The Chancellor’s announcement struck the right balance between supporting recovery and acknowledging the difficult choices that have to be made to restore the country’s finances.
“Food and drink businesses supplying the hospitality and food service sectors will welcome the extension of the furlough scheme. However, we have concerns that support tapers too soon and should be kept under review.
“As the UK’s largest manufacturing sector, we welcome the news that the Bank of England and the Chancellor are doubling incentive payments for businesses hiring apprenticeships. However, increased flexibility of the apprenticeship levy would enable the system to work for the wider food and drink supply chain, particularly SMEs, and must be considered in relation to any new incentives.
“The Chancellor rightly expressed his firm intention not to increase the cost of living and has recognised the importance of encouraging investment as the key driver of recovery. He should therefore review proposed regulatory changes that will increase food prices.”
“Food and drink businesses supplying the hospitality and food service sectors will welcome the extension of the furlough scheme. However, we have concerns that support tapers too soon and should be kept under review.”
NFU president Minette Batters said: “The support offered to businesses by the government throughout the pandemic has been incredibly important in keeping many viable over the past year.
“In the longer-term, farm businesses can play a key role in the investment-led recovery that the Chancellor has set out. With an ambition to reach net zero by 2040, British farming can be a pivotal part of meeting our climate ambitions and increasing productivity.
“Farm businesses, and their diversified enterprises, will welcome the Chancellor’s decision to extend the reduced rate of VAT for retail, hospitality and leisure, extend business rates relief, offer further grants for the self-employed, introduce a new recovery loan scheme and make restart grants available for tourism and hospitality businesses. These are all measures that will support rural businesses to recover from the impact of Covid-19.
“The announcement of the UK Infrastructure Bank to finance green investment could be a crucial tool in stimulating investment and driving green economic growth. The launch of the Levelling Up Fund could also be positive for rural areas in narrowing the growing divide between rural and urban. We look forward to receiving more detail on how this may work in practice.
“However, we are disappointed that the ‘super-deduction’ on machinery investment is only applicable to limited companies and not available to all businesses, especially when significant investment in new farm technology is required.
“With all of these announcements, it’s incredibly important that the needs of rural businesses are accommodated and that they are able to access appropriate funding. Our new ‘Levelling up rural Britain’ report highlights how investment in British farming and rural Britain can bring huge benefits to sustainable food production, but also the entire nation; delivering jobs, green growth, exports and wellbeing for the entire nation. It’s vital it is embraced by the Treasury and the government.”
“In the longer-term, farm businesses can play a key role in the investment-led recovery that the Chancellor has set out”
Call for further measures to support hospitality
Salima Vellani, founder and CEO of Absurd Bird and Kbox Global, a vegan deli now in selected Asda stores, welcomed some elements but felt some did not go far enough: “The measures announced are welcome, but don’t reflect the reality of today’s hospitality sector, for two reasons. First, by supporting an outdated model reliant on bricks and mortar and second, by failing to address the challenges that businesses are facing in the medium to long term.
“The massive shift to online food delivery, needs reflecting in any fiscal support. Restaurants, pubs and cafes need to know they are on a level playing field with ecommerce competitors who are benefiting from all of the gains without the huge costs of bricks and mortar.
“Secondly, the extended VAT reduction is simply a short term prop. Most of the sector are SMEs, for whom rents, and business rates are the biggest drag on their profitability. With 50% of businesses facing closure, most would prefer rent support and an overhaul of the business rates system.
“The intention to support the sector is there, but it’s misdirected, and unless it is addressed, it won’t do much to avoid redundancies, closures, and desolate high streets.”