Although it’s a bit of a cliché to say it, the next few weeks really are crucial for the long-term fortunes of this government. The way in which the priorities of the comprehensive spending review are delivered – particularly by the NHS – will drive voting intentions for years to come.
Similarly, whether the promised increase in defence spending actually materialises, drives growth and improves our chances of avoiding conflict – or winning it if it happens – are literally a matter of life and death. So it seems a bit trivial to ask what the spending review tells us about the current standing of the food and drink industry. Nevertheless it’s an important consideration for every subscriber to The Grocer.
Considered in isolation, the spending review paints a grim picture of where we stand in the national pecking order. Defra is one of the big losers in the review. It’s clear that Chancellor Rachel Reeves doesn’t worry much about the food and drink industry. Like her predecessors, she reckons it is resilient and highly adaptable.
She also bets that the supermarkets will find a way to keep their shelves full, their prices under control and their suppliers in line. Her calculation is that retailers will do what’s necessary and manufacturers will do as they’re told, more or less whatever the impact on their bottom line.
That’s why this week’s announcement of the National Infrastructure Plan needs careful scrutiny. The industry will want to know if investments in road, rail, power and water and the like will be at the level required to keep the country in general – and the food and drink economy, in particular – moving.
So, too, the NHS recovery plan – particularly, but not exclusively, its measures to tackle obesity – will have also a direct long-term bearing on the product portfolios and marketing strategies of most businesses. Even more importantly, they will drive the long-term health of shoppers, consumers and the labour force and their shopping choices.
In this regard, it’s worth noting that one key architect of the NHS plan is very well informed about the way the industry works. Sally Warren is the civil servant at the heart of Wes Streeting’s team. My hunch is that she will have far more influence on the future of UK food and drink than higher-profile public figures like Henry Dimbleby.
She knows the industry very well from her time as a highly impressive and effective key Defra aide to Michael Gove and George Eustice. Her deep operational knowledge means no one will be able to say our industry’s concerns were not considered even if they are not met.
Beyond these domestic issues, a larger spectre looms. Without a ceasefire in the Israel-Iran conflict, it seems highly likely that Iran’s leaders will very soon seek to close the Strait of Hormuz.
If they are successful, that will bring chaos to global supply routes and a huge hike in the oil price. Together with the continuing trade uncertainty, that is almost guaranteed to deliver a recession across the west. That would kibosh all of the Chancellor’s calculations. It would also do more serious damage to our supply chains and ability to import food from around the world.
I hope all this has registered in Whitehall. When he introduced the defence review, Keir Starmer talked about the UK being “battle ready” for the challenges of the next decade. I see few signs that the government has really gripped the fact that ‘food is a matter of national security: if you can’t feed the country you don’t have a country’.
We are not remotely at that point yet, but a prudent government should – amid the welter of other concerns – be thinking about it. None of the government’s announcements seem to leave room to address the need for contingency plans. Starmer and Reeves might yet regret their failure to afford the food and drink industry appropriate priority.
Ian Wright is a partner at Acuti Associates and former FDF boss
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