Tory leadership candidates have been warned they must do more to prop up food and drink manufacturing, or risk worsening inflation on shoppers.
In a letter sent today to Rishi Sunak, Penny Mordaunt, Liz Truss, Kemi Badenoch and Tom Tugendhat, FDF CEO Karen Betts said the next prime minister should intervene in government plans threatening to impose more costs to businesses and consumers.
She called on them to commit to “reducing the costs of regulations” such as the tax on plastic packaging.
“Much of the current regulation actually imposes new costs on our industry without a clear benefit in return,” Betts said in the letter.
“For example, the government’s current plans to create a circular economy for packaging are too complex and have been poorly consulted with business. As such, they are likely to impose more costs on time-pressed buyers. We urge you to step in to make these plans sound and value for money.
“Meanwhile, the thoughtless tax on plastic packaging imposes a huge administrative burden on businesses of all sizes as well as additional costs.”
Betts also urged candidates to commit to tax reforms, including on VAT and corporate rates, and measures to ease labor shortages and create a “pipeline” of skilled workers. “Scarcity of labor and skills is one of the drivers of food price inflation,” she said.
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She called for more cohesive regulatory regimes from devolved UK governments, warning that otherwise there will be cost increases for businesses that “will inevitably end up in items in everyday shopping baskets”.
Betts said: “Companies are doing everything they can to contain the impacts of inflation. We know we have a responsibility to provide good, affordable food, and we cut costs wherever we can to limit price hikes for shoppers.
“But there are limits – our businesses must also remain viable if they are to be a vibrant part of our economy in the future. We are now in the 10th consecutive month of food price inflation. While the cost of ingredients and energy continues to rise inexorably, companies in our sector believe that food price inflation still has some way to go.
“With this in mind, the government must do more to support us through the cost of living crisis, help contain rising prices for households and help our sector out of the growth crisis.”