Can Defra’s new team kickstart the government’s green ambitions?

When he launched the government’s long-delayed food strategy in December, then environment secretary Steve Reed promised no more “random interventions”. He also vowed to create a joined-up industry coalition to tackle food’s biggest health and environmental challenges.

Nine months later he was gone (sent to replace Angela Rayner as housing minister) as part of a crisis reshuffle by prime minister Keir Starmer. The changes also saw farming minister Daniel Zeichner – the man who had been leading the food strategy – sacked before a single one of its new policies could get off the ground.

Brought in to replace them, amid a crisis over food inflation, came Emma Reynolds from the Treasury and veteran MP Angela Eagle, with a new mission from Starmer and Chancellor Rachel Reeves to kickstart growth.

Could these changes see the life sucked out of Defra’s food strategy? And could other landmark circular economy sustainability policies fall victim to the new “growth-first” directive too? Particularly as the industry lobbies desperately for measures to dampen the impact of circular economy legislation coming its way.

Well, Reynolds was certainly quick to signal a commitment to nature following her appointment last month. On Defra’s LinkedIn page, alongside  footage of Reynolds touring a National Trust site near Swindon, she described England as one of the most nature-depleted countries in the world but insisted it was not too late to turn things around “if we work together”.

“I’m looking forward to working with you, so the government can really power ahead with nature,” she said. But despite this rallying call, and several other environmental goals on her ministerial “to-do list”, it was the new Defra secretary’s pledge to “support the UK food and drink industry” that most caught the eye of business leaders.

“It might seem an obvious thing for a Defra leader to say, but this is a new tone and exactly what’s been missing,” one source tells The Grocer. “It’s understood all the new ministers have been told that growth and the economy are the number one priority.”

Reynolds was a lobbyist for the financial sector between losing her seat in 2019 and her return to parliament at the 2024 election, and her Wycombe constituency happens to be home to some heavyweight food manufacturers, including snacking giant United Biscuits. “The fact she has major food employers on her doorstep is grounds for optimism,” the source adds.

“We have an idea which way the wind is blowing,” says another leading industry source. “That’s towards an approach less focused on regulation and more focused on growth, though exactly what that means in actual policy, I’m not even sure the ministers themselves know yet.”

The reshuffle also comes as the sector faces the ongoing headwinds of rising food inflation and an incoming raft of costs from regulation. First up is extended producer responsibility (EPR), with the first invoices due to land this month. Then comes the deposit return scheme (DRS), which is due for launch in two years’ time.

Last month, the FDF suggested as much as 80% of the inflationary pressures impacting the industry resulted from government regulation, upgrading its predictions for food inflation to 5.7% by December – an increase from its forecast of 4.8% in June.

“Industry is furious about the introduction of EPR and DRS, despite corporate lip service about commitment to net zero policies,” says one source. “It’s another cost pressure, and at a time when the US is changing the narrative about climate change, they’re pushing hard for mitigation.”

Controlling costs

What Defra’s change of course means for its two flagship recycling initiatives, EPR and DRS, is unclear.

Most food industry sources acknowledge it’s now too late for ministers to climb down completely on EPR but say the onus must be on ensuring costs are controlled in the future and that councils are held to account for spending the eye-watering sums being raised.

“This is where we need the new leadership at Defra to stand up,” says one industry source. “Labour said it would unlock £10bn in green investment and create 10,000 jobs through processes like EPR, but what we are saying is: how? Demonstrate that to us.

“If you just take EPR, the point of it is to pay for efficient and effective recycling services, but we haven’t seen solid plans from Defra for how we’re going to see those services improve. So are we going to spend more than £1bn from manufacturers for nothing?”

OBR forecasts showing EPR will cost companies £1.4bn in its first year, rising to £1.8bn over three years, are “hard to justify” without guarantees that recycling services will actually improve, say industry leaders.

It’s believed the new arrivals at Defra, along with the “last woman standing” – circular economy minister Mary Creagh – have sympathy for that argument and are looking at ways to safeguard against EPR becoming a bottomless money pit.

“I don’t think there will be any backtracking on EPR at this late stage,” says one source. “But I do think there will be a focus on heading off further increases.”

Defra is thought to be increasingly open to working with the industry on the rollout of EPR and DRS, rather than being seen to impose regulation from above.

“Undoubtedly the joint structures we’ve seen arise, such as Pack UK, are being favourably looked at by ministers,” the source adds. “Certainly, they’re much more favourably looked upon than those schemes that come from the dead hand of the arms’ length structures.”

“Good environmental policies can boost productivity, cut costs, and create green jobs — but only if they’re designed with input from business and reflect the real pressures we face,” says Jim Bligh, director of corporate affairs and packaging at the FDF. “After years of high costs and new taxes, that money just isn’t there.

“If Defra and other departments work with food and drink manufacturers and avoid adding more costs, they can help our sector grow, stay resilient, and meet sustainability goals.”

Some believe there is an outside chance minsters might yet scrap or delay the already delayed DRS, despite Creagh’s enthusiasm for an October 2027 UK-wide launch.

“I won’t relax until we actually see it off the ground,” says one source. “I still think that if the retailers were given the option of losing DRS, so they could take out that cost in one fell swoop, several would take it.”

For now, all eyes will be on the Welsh elections in spring after its government announced in November that it was pulling out of the UK-wide plans, in order to create a DRS of its own.

“It’ll be interesting to see the fate of DRS if Reform wins those elections,” says James Bielby, chief executive of the FWD. “If they scrap DRS, we could end up with an even worse situation than we have now.”

But Bielby believes that broadly speaking there is a large degree of consensus on green policies politically – for now. “Some of the policies that are keeping industry awake at night, like DRS and EPR, are inherited from the previous government. Reform are keen to push the idea of a ‘uniparty’, and although the Tories in opposition have tried to row back on their support for DRS, circular economy policies have been consistent from both Conservative and Labour governments.”

DRS, argues its supporters, will create tens of thousand of jobs in waste collection and processing and, as such, is a growth policy, not just a green tax.

Zeichner shock

But what of the broader food strategy? Perhaps the biggest shock of the reshuffle was the dismissal of Zeichner. Having shadowed his role of farming minister for three years, this March he set up the Food Strategy Advisory Board –a body made up of industry leaders, NGOs and academics – to spearhead the plans.

Only in July, Zeichner set out the 10 “priority outcomes” for the strategy, including plans to make Brits’ diets healthier, greener and more affordable

He told The Grocer the government wanted to create a “Good Food Cycle” framework to develop environmental policies that will boost investor confidence and accelerate investment throughout the food system.

However, the outcomes were widely criticised, even by Zeichner’s many supporters within the industry, for being too vague and insufficiently focused on growth. And the writing was perhaps on the wall after The Grocer revealed plans for a whitepaper to back up the food strategy with regulatory tech, included in an initial draft of the outcomes, had been scrapped after the intervention of No 10.

Sources following Defra admit Zeichner’s departure poses huge questions over the future direction of the strategy and wonder whether it will mark a change of direction or a cliffdrop in government priorities.

“You could have knocked me over with a feather when I heard the announcement about Daniel Zeichner,” says one insider. “That, to me, is madness. He was all over the brief, knew all the people there and, unlike a lot of ministers before him, he was really passionate about achieving change in the sector.”

The reshuffle at Defra also came just as Zeichner and co were poised to press go on a major change of direction of their own within the food strategy.

While the announcement was delayed for two weeks amid the shake-up, The Grocer revealed last month that the department had ordered a major streamlining of its collaboration on data with the food industry, in a move that would see many of the functions of the Food Data Transparency Partnership (FDTP), launched in 2023 in a belated response to Henry Dimbleby’s food strategy for the last government, wound up.

A letter to food companies from Defra’s director general for food and biosecurity, and Chris Tyas, GS1 chair and co-chair of the FDTP design partnership body, said Defra was still committed to continuing working with the industry to improve the transparency of data across the supply chain on areas of health and sustainability.

“Our shared mission to improve and join up food chain data is fundamental to achieving the government’s food strategy ambitions,” the letter said. “We are committed to maintaining a collaborative approach with stakeholders across government, industry and wider in developing the detail of future policies.”

Meanwhile, details of how the food strategy will require food companies to report on health and sustainability are due to emerge in the next few weeks.

Defra deconstruction

It appears Reynolds and Eagle may first have a few more pressing priorities. Within days of their appointments, The Times reported that Reynolds, under the direction of her old boss at The Treasury Reeves, was lining up a brutal deconstruction of many of Defra’s dozens of arm’s length bodies.

These range from large bodies, such as Natural England and the Environment Agency, to a long tail of smaller organisations including the likes of the Office for Environmental Protection and the Joint Nature Conservation Committee.

The Times reported one source as saying the new environment secretary would be looking “in detail” to see whether they were all necessary and fit for purpose.

It claims ministers plan to publish a review into the future of many of the biggest environmental quangos as part of a push to slash regulations before the budget, with no less than 37 agencies under Defra’s control.

“What happens with the arm’s length bodies could have a potentially huge impact on the industry and indeed on sustainability,” a separate source tells The Grocer. “This is an area that’s ripe for rationalisation. The back office costs of these bodies are extraordinary, especially relative to the grants they get. The duplication that goes on between the different agencies is also quite staggering when you look into it.”

A ministerial war on quangos might be just the sort of thing that would appeal to Reeves as a tough message to industry ahead of the budget. Whether it goes far enough to please food companies facing a bombardment of green taxes is another matter altogether.

Green Week features are sponsored by EcoVend