Food strategy

The government is set to launch a new Food Strategy Advisory Board with members drawn from senior leaders across government and the food system. The Board represents the next step in the government's commitment to develop a comprehensive food strategy that backs British food and boosts the economy as part of the Plan for Change.

The food strategy will work to improve our food system to:  

• provide more easily accessible  and affordable healthy food to tackle diet-related ill health; helping to give children the best start in life and help adults live longer healthier lives 
  
• maintain food security by building resilience in the face of climate shocks and geopolitical changes, strengthening the supply chain which operates so effectively to keep us fed   
  
• reduce the impact of farming and food production on nature, biodiversity and climate, while supporting the sector through that transition
  
• ensure growth is at the heart of its strategy using its Growth Mission to drive the investment, productivity and innovation that builds resilience, so that the UK's largest manufacturing sector can realise its potential for economic growth 
  

IGD is supporting the Defra with the food strategy acting as a co-secretariat for meetings of the Food Strategy Advisory Board comprised of senior leaders across government and the food system. 

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Resilience risk ranking

In IGD’s latest report, Building a resilient food system, climate change is identified as the greatest long-term risk to the UK food system. This comes out ahead of other risks including geopolitics and economics of the food system.

Download the report to understand:

• an in-depth analysis of the ten greatest long-term risks
  
• why climate change and geopolitics pose the gravest threats
  
• how the nature of risk has evolved over the past year
  
• examples of businesses and governments prioritising resilience

Labour market

New labour market data from the ONS reveals strong demand for labour in the UK economy as of January 2025. 

Unemployment edged up slightly to 4.4%, but remains historically low, with vacancies still exceeding pre-Covid levels.

Average wages are rising faster than inflation, delivering “real terms” pay boosts for many workers. However, the government faces a pressing issue: rising inactivity rates among 16-64 year olds. These rates are higher now than before Covid, and the growing population compounds the challenge.

Among over 18s, 18-24 year olds are most likely to be inactive, largely due to education. However, the most significant driver of inactivity is long-term sickness, accounting for 30% of this group, up from 25% pre-Covid.

IGD opinion

For now, labour demand is holding up despite weak economic conditions. However, April looms with a significant increase in the National Living Wage (NLW), the third large increase in a row, and adjustments to employer National Insurance Contributions (NICs).

While a higher NLW will benefit many workers, it will drive up labour costs across industries, potentially forcing some employers to cut jobs or scale back hiring. 

The redundancy rate remains low at under five per thousand. But pressures may mount. In the food and drink supply chain, the impact won’t be evenly felt, with retailers and away from home operators likely to bear the brunt. 

Welfare benefits

The Work and Pensions Secretary has announced plans to reform the benefits system, intended to save £5bn per year by 2029-30.

The objective is to reduce benefit spending and to release some of those currently claiming working-age benefits into the labour force.

Changes will focus on young adults and those with disabilities or health conditions - up to £1bn will be made available to help them to access work.

Eligibility for some benefits will be tightened, especially Personal Independence Payments (PIP), although exceptions for the most vulnerable will apply.

Employment and Support Allowance (ESA) and Job Seekers’ Allowance (JSA) will be combined into a single, time limited benefit.

IGD opinion

The government’s plans have provoked opposition from its own backbenchers, and it is not certain that all elements will be actioned.

However, despite the angry response, projected savings are both speculative and quite modest.

According to OBR estimates issued in October 2024, total government expenditure will be around £1,510bn in 2029-30. 

So, even if the £5bn savings are achieved, this will amount to 0.3% of government expenditure that year.

Putting it another way, debt interest in 2029-30 will be about £122bn, so £5bn of savings will fund about 15 days of interest payments. 

These changes alone will do little to put the government’s finances onto an even keel.

The Spring Statement, expected on 26 March will, hopefully, provide detail on what else the government plans to do.

Lower GDP forecast 

The Organisation for Economic Co-operation and Development (OECD) has downgraded global economic growth expectations due to the recent outbreak of tariff warfare. UK GDP is predicted to increase by 1.4% in 2025 (-0.3% from December’24 projections) and 1.2% in 2026 (-0.1%). Canada and especially Mexico, will be badly affected. China is expected to weather the storm slightly better.