FDF tells government how to help food industry

An economic upturn is unlikely to gain momentum until well into 2010 and there are a number of factors that could keep manufacturing output well below pre-recession levels for a sustained period, according to the Food and Drink Federation (FDF).

In a letter sent to the Chancellor, ahead of the pre-Budget report on Wednesday, the FDF suggested a number of ways in which the government could help the industry. The letter was jointly sent by a number of groups, including manufacturers’ organisation EEF, The Manufacturing Technologies Association and the British Plastics Federation.

The letter said: “As companies move from recession to recovery, the need for stability in the business environment remains critical. Manufacturers have moved from crisis management to ensuring they are positioned to take advantage of an eventual recovery in demand ... continued pressure on cashflow and ongoing credit constraints may well hamper these efforts.

“While the UK needs to move to a more sustainable fiscal position, there are clear risks of rapidly reversing the support for the economy before recovery has taken root. Equally, we must ensure that policy continues to support the shift to a more balanced economy.”
In order to support manufacturing through the early stages of recovery the letter made some recommendations: urging the Chancellor to freeze the rate of corporation tax for small companies until April 2011; delay the introduction of regulation that adds to the burden on businesses; extend the 40% first-year capital allowances for an additional 12 months; and initiate dialogue with EU authorities to extend the Letter of Credit Guarantee Scheme to developed economies.
Julian Hunt, FDF director of communications, said: “Food and drink manufacturing is both a strategic and an economically vital component of the UK economy. We will be looking closely at what the Chancellor has to say and hope to see signs that he has listened to the needs of manufacturers, particularly those in our sector who play such a key role in the economic health of the nation.”

He said that the food and drink manufacturing industry was the single largest manufacturing sector in the UK, with a turnover of £72.6bn and a gross value added of £21.6bn, accounting for 14% of the total manufacturing sector. It employs around 440,000 people.