In the second part of an extensive interview on the implications of Brexit for UK food companies, Ian Wright, director general of industry association the Food and Drink Federation, speaks with Ben Cooper about the longer-term implications of Brexit for UK food and farming policy and on the food industry’s labour force.
The confidence survey the UK’s Food and Drink Federation published last week on how its members were feeling almost four months from the referendum on EU membership suggests little of the majority who were against Brexit have changed their mind since 23 June.
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A pre-referendum poll by the FDF showed 71% of its members who were not in favour of Brexit. That some 69.5% of respondents to the confidence survey published last week said they were less confident about the UK business environment following the referendum tells its own story.
However, as one might expect from the man who has urged his members to “make the most of Brexit”, FDF director general Ian Wright exudes calm concern rather than despondent despair.
“We are very vulnerable, both at the labour market level and in terms of input costs, to Brexit, and then longer term we have great concern around the legislative framework in which we’ll be operating,” Wright freely concedes.
However, while the initial challenge for food companies will be to come through the Brexit process unscathed – or perhaps just making it through it at all will satisfy some – Wright believes the reshaping of the legislative framework around food and farming that is likely to follow Brexit could be “positive” for the food sector in the longer term.
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By GlobalDataWhile retaining the best possible access to the EU Single Market and remaining in the EU Customs Union are vital in Wright’s view, the food industry in the UK faces another huge challenge in the wake of Brexit in the form of disruption to its supply of labour.
The UK food industry’s reliance on EU workers and their importance in filling a skills gap to be created by the high number of workers over 50 were key campaigning points for the industry – and remain major concerns. “The labour force issue is really urgent and at the moment not solved,” Wright says. “You have 130,000 EU workers in the workforce and then you have a different 130,000, broad figures, of people who are 50 to 55 who will be leaving the industry at some point, and we don’t have any way of replacing either of them.”
While Wright says some of the UK government’s reassurances given to EU workers currently in the UK have been “helpful”, Wright says the staff are facing an uncertain future and this is shared by their employers.
Administration of migrant labour will be key if the move to the post-Brexit era is to be negotiated safely by the UK food industry. Wright is concerned a system possibly based on work permits will be problematic for the food industry, not least as a considerable amount of recruitment of non-UK EU nationals is done once those workers are in the UK. “If we’re saying that people have to have jobs promised before they can come here, I’m not sure that the way that this industry is set up will allow for that. We have to change the way we work but at the moment it would take you quite a long time to recruit.”
Wright speaks of lengthy processes for recruiting from outside the EU. After Brexit all foreign recruitment could be subject to these administrative strictures, and it could be worse. “You’ve got to assume that after the Brexit immigration will be even more punctiliously managed, so I think that’s a big challenge.”
Pro-Brexit campaigners want to see the UK develop its skills base, which would make it less reliant on workers from outside the UK, and it is an aspiration Wright shares for the industry he leads. “We have to take the skills provision and our expectations of skills in the marketplace up,” he says. “Our future must involve that.”
The FDF had asked the UK government to delay the introduction of its Apprenticeship Levy following the Brexit vote, saying it would bring “unwelcome additional burdens on hard-pressed industry at a moment of crisis”. However, Wright believes that argument has been lost and the Government will not pause the initiative. He also believes the UK government is not ready, however, and “they might have to pause it if there is chaos as it is implemented”.
The rights and wrongs of the Apprenticeship Levy to one side, Wright believes filling the skills gap the food industry is facing will necessitate a commitment by government, with the help of industry, to develop apprenticeships and more “practical” education options for school leavers.
He believes there needs to be “a really serious attempt to rebase people’s views of working in apprenticeships and working in business”, not least by establishing better links between industry and educational institutions. Apprenticeships should “become much, much more important in the equation”.
“I think the Government needs to think seriously about how it portrays people who don’t go to university,” Wright adds. “It’s a big cultural shift actually, to move from this idea that university is the be all and end all to something that is a bit more practical. And industry’s got to play its part. We’ve got to be in there and drive the development of proper programmes for training people, retraining people, keeping them skilled up.”
The other long-term policy area the FDF will seek to influence is how the UK government frames legislation, regulation and subsidy around food and farming, when it is no longer bound by the EU’s Common Agricultural Policy (CAP). As it stands, the UK government has only committed to retain the status quo until 2020, after which there is potentially a blank sheet.
The Brexit proponents suggested a potential benefit in the medium to long term would be the evolution of better legislation in food and farming, a more bespoke regulatory and support framework for agriculture and food. While this is entirely possible and an appealing vision, it represents a mammoth task.
Moreover, the concern for food companies is the attention of the Department for Environment, Food & Rural Affairs (Defra) will be drawn primarily to the challenges in farming, rather than the interests of food manufacturers, though, in an early response to questions on Brexit, Prime Minister Theresa May made a point of grouping farming and food processing together.
Nevertheless, Wright remains concerned agriculture will dominate Defra’s agenda. “Well, I think the biggest single problem that Brexit poses for Defra is what happens after the Common Agricultural Policy. And to some degree that’s a worry for us in the manufacturing sector because we sort of feel that that will take up all their time.”
Agriculture pressure group Sustain has said the UK government will have to rethink its draft 25-year food and farming plan in the wake of Brexit and will need to consult widely in so doing. The FDF will be pushing for UK food processors to be included in any consultation and says it has established a good dialogue with Defra around the post-Brexit challenge. “I feel they’re listening to us. I’m not sure how much goes in but they’re definitely listening to us,” Wright remarks.
As to a long-term vision for food and agriculture in the UK, Wright subscribes to the view that tearing up the CAP and putting something tailored to the UK’s requirements in its place could be beneficial for food companies.
“If you accept that the Common Agricultural Policy has been a massive distortion of the market in terms of its intrusion into almost everything that people do, you would have to assume that, once it’s gone, this could have all sorts of implications for the way the food industry is structured,” Wright says. And positive implications? “Yes. I think they could be positive actually,” he adds, with an upward inflection in his voice that suggests his answer may come as a slight surprise.
That optimistic tone perhaps reflects Wright’s determination that his members do indeed make the best of what many of them clearly believe to be a bad deal. However, this is not the blind and blithe optimism of Voltaire’s Dr Pangloss, whom Wright references in the first part of this interview. The Panglossian view is that all is for the best in the best of all possible worlds. The responses to the FDF member surveys suggest the majority of UK food companies believe the vote on 23 June has offered nothing like the best of all worlds but Wright knows the sector has to put its grief to one side and look to the future.
Click here for part one of our interview with FDF director general Ian Wright, in which he said the UK food and drink industry is “disproportionately impacted” by Brexit.
