With the general election drawing near, there’s a blossoming romance between Labour and big business. But where does it stand on the crucial issues affecting food retail and farming?
Keir Starmer’s courtship of British businesses is working. A sold-out Labour business conference last week at the Kia Oval in London saw top shadow cabinet ministers rubbing shoulders with some 400 industry heavy-hitters, including Tesco CEO Ken Murphy and Iceland chairman Richard Walker.
A few days earlier, Walker – who only months ago gave up plans to stand as a Conservative MP – switched his support to Labour. And Starmer returned the favour, accompanying Walker on a tour of an Iceland store. The former Tory donor later wrote in a Guardian op-ed: “Starmer has exactly what it takes to be a great leader.”
This blossoming romance between Labour and big business is hardly surprising. The latest YouGov voting intention poll puts Labour at 47%, nearly 30 percentage points ahead of the Conservatives. But as the country gears up for a general election, where does Labour stand on crucial issues affecting retail, health, and the environment? And what could the food industry look like under a Starmer government?
The business conference marked a crucial third phase in Labour’s outreach to business: providing “meat on the bones”. At the conference, Chancellor-in-waiting Rachel Reeves reassured businesses that she would cap the current 25% rate of corporation tax for the duration of the next parliament, as she vowed to “work with business” to grow the economy.
Labour’s plan includes a statutory Industrial Strategy Council, a Council for Economic Growth and a British Infrastructure Council. Arguably the most arresting idea to date has been the party’s Green Prosperity Plan. Together with Great British Energy, a new publicly owned company, it aims to reduce energy bills while funding an economic recovery built on decarbonisation and automation. A shock u-turn last week, which saw the party scale back on the flagship policy’s commitment to spend £28bn a year on green energy projects such as developing electric vehicles and offshore wind farms, may impact logistics and farming.
But the clean energy transition is a long-term plan, while food and grocery businesses are facing more pressing cost increases right now – including the national living wage increase in April – and it’s unlikely a Labour government will ease this burden.
A total reform of the business rates system, which the BRC claims has become an “unsustainable burden” for many, is the biggest ask from retailers. The group wants the business rates multiplier, a requirement for rates to raise a fixed sum each year, to be scrapped. The controversial tax is also “very punitive towards large buildings” like warehouses, says UK Warehousing Association chief Clare Bottle. She’s aware Labour “does not have a reputation of being a government of low tax”, but hopes “they could entertain some reform”.
Starmer has also vowed to “get Britain building again”, reforming planning rules to deliver an extra 1.5 million homes and accelerate key infrastructure projects. “Driving impetus into our planning system will be a great place” for Labour to start, Iceland’s Walker said.
The party is also clear where it stands on retail crime, with plans to ditch the £200 rule on shoplifting, ban repeat offenders from town centres, introduce more neighbourhood police officers and PCSOs to patrol the streets, and bring in an offence for shopworker assault.
Health & sustainability
Labour has historically advocated for a more interventionist approach, particularly on health issues that place a huge burden on the NHS, like obesity. Starmer has pushed back against the “nanny state” narrative, making clear children’s nutrition will be front and centre of public health policy if he wins the general election, pledging to bring back a 9pm watershed for junk food advertising on TV, a policy postponed by government last year.
Labour has also been in conversation with innovation charity Nesta, which has worked up plans for supermarkets to be set mandatory targets on sales of healthy food. At Labour’s annual conference last year, leading supermarkets promised to back Starmer.
“The government’s own research showed voluntary industry efforts to reduce sugar had failed, and there are plenty of industry voices desperate for a level playing field – they need regulation,” says Sustain head of public affairs Orla Delargy. Starmer also recently supported Iceland’s campaign for a change in regulations around the promotion of infant formula.
Another obvious piece of legislation for Labour to revive is the National Food Strategy, the independent review spearheaded by former Defra tsar Henry Dimbleby. As Delargy notes, it was a “seminal piece of work two years in the making with lots of implementable ideas” that the current government either ignored, watered down, or dumped. These included a sugar and salt reformulation tax, extending free school meals eligibility, and mandatory reporting of health data for industry. “There’s no reason why Labour shouldn’t just pull it out of the bin,” she notes.
Likewise, Labour will be under pressure to deliver on environmental policy, reviving plans for a deposit return scheme for drinks containers and getting to grips with extended producer responsibility legislation for packaging, both of which have been shelved by the Tories. This was partly achieved by industry lobbying that claimed the costs of DRS and EPR would push up inflation – in Ireland, the largest DRS machine, at a Tesco, cost €200,000 alone. Grocery leaders will surely latch onto Labour’s public admission of the costs of delivering net zero following last week’s u-turn, but in the long run Starmer is widely expected to press ahead with recycling plans.
Trade & immigration
While rejoining the EU is not on the cards, Starmer has committed to aligning the UK more closely with the bloc to minimise Brexit’s disruption on trade of food. He has previously said he would renegotiate a vet deal with the EU that would reduce the need for SPS checks.
Labour’s business & trade shadow secretary Jonathan Reynolds has also pledged to pursue fewer but better trade deals, in a jab at Liz Truss’s controversial Australian and New Zealand agreements. It’s therefore unlikely Reynolds will make pursuing new deals a priority if Labour wins the election, though he has been supportive of current negotiations with the likes of India and trans-pacific nations.
Crucially, Labour will be making sure the UK’s strict food safety standards are upheld during trade talks, notes a senior source in the farming industry. “[Labour] are pro-trade but they want to do good deals that protect UK standards,” they say. That will mean beefing up inspections at Britain’s ports, and directing more resources towards government departments like the Food Standards Agency and the Animal & Plant Health Agency, the senior figure notes, an “area where they would be comfortable”.
Protecting UK standards while maintaining healthy domestic production, in the face of fierce international competition, is one of many worries for the farming sector, which continues to grapple with inflationary pressures, labour shortages, and climate change. Shadow Defra minister Daniel Zeichner confirmed last year Labour would back government proposals for an improved environmental land management scheme, including setting up a payments framework to help farmers transition to more sustainable land use.
New Defra head Steve Reed is also “fully aware of the massively increased costs in the food supply chain at the moment”, says Wes Ball, former special adviser to Labour minister Hilary Benn and now senior VP at Edelman Global Advisory UK. “Labour are committed to the energy transition and they’ve talked about how farming can generate electricity and contribute to sorting out the grid, which can make a significant difference for rural communities and have huge benefits for the whole supply chain.”
The food and drink sector top dogs of a future Labour government
Shadow secretary of state for environment, food and rural affairs (Defra)
Reed – an MP for Croydon North since 2012 – moved from the shadow justice team, where he’d been a minister since 2021, in September. The 59-year-old, while closely linked to Starmer’s inner circle, has little experience of his new brief, and will have to get to grips with a department fraught with unresolved issues, from post-Brexit agricultural policy to the burning platform of environmental Armageddon.
Shadow secretary of state for health and social care
A rising star – tipped by some as a future leader – Streeting was originally promoted to the shadow cabinet in May 2021 as shadow secretary for child poverty, and moved to the health brief six months later. With obesity now costing the NHS an estimated £100bn, Streeting is expected to take a hard line with food industry giants, but he will need to be mindful of the impact of his policies on inflation in the cost of living crisis.
Shadow home secretary
One of the few members of the shadow cabinet with ministerial experience, Cooper returned to Labour’s frontbench in 2021, in the same shadow cabinet role she held from 2014 to 2015. She will need all that experience for one of the toughest gigs of all in politics right now, with responsibility for stemming immigration balanced against tackling labour shortages in farming and logistics, as well as growing retail-related crime.
Shadow secretary of state for business, energy and industrial strategy
Reynolds is a well-liked character at the centre of the shadow cabinet, and has been widely credited with helping Labour to foster better relations with business. It’s a complex role, the voice of businesses large and small, and with the need to work closely with the Treasury and the Foreign Office in developing policies to deliver growth and improve trade relations with the EU and other post-Brexit allies.
Shadow secretary of state for energy security and net zero
The former leader of the party returned to the frontbench in 2020 as shadow secretary of state for business, energy, and industrial strategy. Miliband moved across to this energy and climate-related role in 2021, but he also has invaluable experience of this area as former secretary of state for energy and climate change at the back end of Gordon Brown’s Labour administration in 2008-2010.
Getting a grip on skyrocketing immigration levels while solving chronic labour shortages is set to be another thorny issue to grapple with. The government recently announced plans to replace the Shortage Occupation List with the new Immigration Salary List. As part of that overhaul, it increased the minimum salary threshold for a Skilled Worker visa from £26,200 to £38,700 to encourage businesses to hire domestically. However, many in the industry who rely on overseas workers claim it will push up labour costs, because domestic offer for jobs like butchers and food processors simply can’t match the demand.
Shadow home secretary Yvette Cooper backs measures like these to limit net migration and reliance on overseas workers, promising to focus more on “homegrown talent”. This will mean more investment in education and training – which seems unlikely to help those skills gaps that need to be filled urgently.
“When it comes to seasonal agricultural workers, it’s an annual difficulty growers encounter,” the farming source says. And while Labour “talk quite a good game, and it feels as though they would be sympathetic, it’s still unclear how exactly”. Still, the insider expects “to have a more sensible long-term conversation that involves the industry, Defra and the Home Office” if Labour does come to power.
Labour has also vowed to reform the inflexible Apprenticeship Levy. That will be good news for retailers, half of whose estimated £250m contribution is unused because of restrictions, says the BRC. With businesses unable to use the money to fund any courses that are shorter than one year, it’s costs them training opportunities in struggling areas such as food production and preparation, logistics, warehouse operations and quality control. The UKWA’s Bottle also welcomes Labour’s reskilling plans: “We want to invest in our people, and we would expect Labour to support that.”
Also on the workforce front, shadow deputy prime minister Angela Rayner has pledged to ban zero-hour contracts, which will have huge implications for gig economy workers, including delivery drivers. The party recently attracted criticism for replacing its plans for a single “worker” status for all but the genuinely self-employed in favour of “a simpler framework” and more pro-business approach, which some claimed was a sign Labour was ready to put corporate interests above the rights of workers. Having Deliveroo sponsor the party conference for the past two years surely helped cement that perception. Nevertheless, as The Gig Economy Project co-ordinator Ben Wray points out, “sector-based collective bargaining is supported [by Labour], so this may enhance [the] rights of delivery workers”.
It is a long time since the Labour Party courted suited-up executives this concertedly. And there are sure to be areas like this where the two sides clash. But food policy is sensitive and complex, and relies on close co-operation. Labour would argue that’s exactly what the country needs right now.