New government, new direction?

The Labour Party has won a very large majority in the general election and has secured a strong mandate to carry out significant policy changes related to the food and consumer goods industry. 

Our new Viewpoint report, New government, new direction? launches on 11 July. It looks in detail at how the results of the general election will impact the food and consumer goods industry. Register your interest in being the first to receive the report here.

Outlined below are five key areas: 

Economic outlook

The new government inherits a sluggish, low-growth economy. The public finances are not in a good state, with public debt at historically high levels. The government has pledged to “stick to tough fiscal rules with economic stability at their heart”. The new government has a mission of kickstarting economic growth to secure the best sustained performance in the G7. However, it is likely that the goal of securing the recovery will not be achieved quickly.

The good news is that food and drink inflation is expected to be fairly low in the near-to mid-term. Register here for the report to see the full inflation forecasts. 

Consumer sentiment

Consumer sentiment is improving. Lower inflation and rising real wages are helping consumers. However, there remains an income divide, impacting spend in both food and grocery and eating out. Many consumers are still struggling, with more using savings and debts to pay for essentials. 

There are fears about future taxes and a majority still expect higher food prices. This is resulting in many consumers planning to use a range of savvy shopping tactics to save money on their food and groceries.

Health and diets

Improving the health of the nation is an essential part of increasing productivity, bringing more people back into the workforce, and supporting the NHS.

The new government has committed to a number of policies that will impact the food system. This includes banning the advertisement of ‘junk food’ to children. Tackling obesity is expected to become a key area of focus for the new government. Food businesses have a role in improving the diets of the UK population. Establishing the best evidence to tackle this enormous challenge and design effective policy interventions is essential.

Agriculture and sustainability

The Labour manifesto recognised that food security is also national security and it will support UK production whilst protecting the environment. The government has committed to introducing the long-awaited land-use framework and will re-assess the current Environmental Land Management scheme to ensure it works for UK farmers and supports the restoration of nature.

Labour and skills

Labour’s New Deal for Working People, will be central to the government’s strategy over this parliamentary term. There is a raft of policies that, if introduced, will have a significant impact on the food system including introducing enhanced employment rights, and making flexible working the default from day one. 

One of the key things that businesses complain about is a lack of skills and training. The new government is committed to resetting the skills agenda. It will change the existing Apprenticeship Levy to create a new Growth & Skills Levy. However, these and other changes will take time to have a significant effect.

In the coming months, IGD will deliver nationwide initiatives in schools, colleges, job centres and prisons to inspire more people to connect with career opportunities across the food system. Collectively, this work will help us grow the skills we need at home. Interested in your business getting involved? Learn more here.