Short read
Food industry’s Spring Budget 2024 wishlist
Reform the Apprenticeship Levy
After many expressed their disappointed last Spring on the Apprentice Levy not being reformed, the food sector is hoping the UK Chancellor will include it this time around.
Speaking with Mark Lumsdon-Taylor Partner, head of food at MHA, and Tim Dee-McCullough, the accounting and advisory firm's director, increased opportunities for apprentices is a must.
“We are hoping for a reform of the Apprenticeship Levy to allow use of Levy funds for shorter, modular training to widen participation and appeal,” the duo told Food Manufacture. “Realignment of the functional English and Maths skills to meet basic but not overextended goals will help to attract increased interest and retention is a welcome by-product of our hoped-for reform.”
And they were not alone in these sentiments.
As Marks & Spencer boss Stuart Machin recently aired in a Linked In article: “Reforming the Levy would make such a difference for our young people, lifetime learning, and productivity.
“In the short-term, the Government should make it easier for employers to use more of the funds. Longer term, while apprenticeships should remain a focus, the Government should expand what the Levy can be used for to other skills development and training – especially digital skills.”
Incentivised investment to drive food security and sustainability
With agricultural and food production investments often taking many years to recover, many in the industry are calling for incentives and changes to encourage investment into UK food security and sustainability.
Energy usage
To this end, the Food & Drink Federation (FDF) is keen to see a simplified application process and increased future budget for the Industrial Energy Transformation Fund (IETF). This fund supports the development and deployment of tech that helps businesses to transition to a low carbon future.
Similarly, the IETF is a focus for the National Farmers Union, which is asking for the fund to be expanded and include the poultry sector moving forwards.
For the British Retail Consortium, more consideration should be given to ‘green’ vehicles and infrastructure. This includes a proposal to accelerate an uptake of green fuelled vehicles by providing grants and tax incentives for investment in vehicles and infrastructure upgrades.
Alongside other recommendations, it suggests one could incentivise private sector investment in electric vehicle charging infrastructure by applying the 5% VAT rate on domestic charging to commercial charging.
Ahead of the budget, the government has already announced almost £73m in combined government and industry investment for 'cutting-edge automotive R&D projects' to support the development of electric vehicle technology.
Packaging schemes
The FDF is also urging the Government to proceed with a UK Deposit Return Scheme (DRS) “as soon as practically possible”.
It also wants to see more detailed plans for the Extended Produced Responsibility (EPR) scheme, with a timeframe for consistent collections in England by October 2025 and equivalent policies within the Devolved Nations.
Clarity over tax relief related to ELMS
For both MHA and the NFU, inheritance tax uncertainty is another concern.
“As issues around the complexity of ELMS become apparent, we’d like to see a much-simplified underpinning that ensures a fair balance between food security, environmental impact and sustainable livelihoods,” MHA told Food Manufacture.
The ELMS – or environmental land management (ELM) schemes – has been put in place to support the rural economy, whilst helping to drive biodiversity, improve water quality and reduce flooding.
“In particular we would like to see HM Treasury remove the uncertainty over the tax treatment of agricultural land entered into environmental schemes,” the experts at MHA continued.
As the NFU put it, it would like the Government “to amend inheritance tax agricultural relief to ensure that all agricultural land entered into the Environmental Land Management schemes continue to qualify”.
Grants for technology
In addition, both the FDF and MHA are also calling for target financial incentives to increase the uptake of robotics, automation and digital technologies.
“We would welcome the creation of targeted financial incentives through a food manufacture grant system of matched funding that secures increased uptake of the elements that will help the UK food sector to be effective, efficient and forward-thinking. Areas such as AI, robotics and automation to create a sustainable UK food industry,” explained the representatives from MHA.
Health and obesity
As the discussions around ultra processed foods, obesity and HFSS continue, it’s unsurprising that the FDF has said it’s keen for drive initiatives that encourage ‘healthier’ NPD.
Specifically, the association has asked for the eligibility criteria and accessibility of R&D tax credits and grants to encourage healthier product innovation, alongside establishing a UK-wide ‘reformulation for health’ programme.
We have also recently seen 60 of the UK’s most senior health experts, including partners from across the Recipe for Change coalition, writing to the Chancellor to put health at the heart of his budget.
Among the ten recommendations to ‘save the NHS’, the group has called for a salt tax, the implementation of a pre-watershed ban on ‘junk food’ advertising, and a reduction in cartoons on packaging aimed at children.
“We fully support the calls in this letter for the chancellor to put prevention of ill-health at the centre of the Spring Budget,” Kate Howard of the Recipe for Change campaign said.
“Alongside the impacts of tobacco and alcohol, as a nation we are flooded with unhealthy food options making it hard for families to access nutritious food. The tide is turning and it’s time for the Government to act on all the policy ideas and evidence available to prioritise both the health and wealth of the country, including expanding the sugary drinks tax and introducing a tax on foods high in salt.”
In other news, profits have frozen for food manufacturers, according to a report from inventory management software brand Unleashed.
