Budget supports SMEs but falls short on curbing prices

By Laura Crowley

- Last updated on GMT

Related tags: Fdf, Regulation

The UK Food and Drink Federation (FDF) welcomes the Chancellor's
vow to limit regulatory burdens and assist SMEs, but regrets its
shortcomings concerning green issues and food prices.

Alistair Darling, UK Chancellor of the Exchequer, announced the budget yesterday, receiving mixed feelings from the food industry. Restricting the amount of regulations placed on manufacturers was one of the main concerns expressed by the FDF prior to the Budget announcement. However, the body remains wary of how the Chancellor's changes will be implemented. "While the headline announcement is great, the devil, as always, will be in the detail,"​ said Melanie Leech, FDF director general. Keren McCarron, spokesperson, told FoodNavigator.com that the budget was a "mixed bag". "We would have liked to see some specific news on investment in developing a waste recycling infrastructure, for instance,"​ she said. The FDF also expressed concerns on how the plans could effect food prices.Regulatory burdens ​Included in the budget was the promise to reduce the cost of regulations to businesses. A report published last month gathered opinions from FDF's membership, which included manufacturers of all sizes in key product categories. It showed that food executives thought competitiveness suffered under "hurried and non evidence-based regulation designed to satisfy public opinion".​Leech said: "Our members tell us that increasing regulatory burden is one of the biggest threats to their ability to compete - so we clearly applaud this initiative. ​However, she added: "We are not clear how government can apply meaningful quotas on departments given that so much regulation affecting our industry comes out ofBrussels." ​Last month's report showed that industry members felt the UK enforces EU legislation more energetically than other member states, resulting in unfair competition. The Chancellor's Budget also showed a commitment to an early conclusion of the Doha round of WTO negotiations, which aims to free global trade by cutting industrial and agricultural tariffs and by reducing farm subsidies. The FDF welcomed this as the food industry exports £6.5bn (€8.5bn) worth of products a year. Environment and price increases ​ The FDF has established a five-fold environmental action plan to promote a greener UK food industry and so applauded Darling's push on measures to protect the environment, but said concerns remained on its possible effects on food prices. Leech commented on changes made to the fuel duty, saying: "The temporary freeze on fuel duty is useful, but given the fact that food and drink manufacturers are coping with soaring costs, and consumers are being impacted by increasing food prices, it would have been better to have given some stability by ruling out the rise altogether." ​The Budget included the decision to implement the Renewable Transport Fuel Obligation, which ensures 5 per cent of all fuel sold on UK forecourts comes from renewable sources by 2010. McCarron said: "It is difficult to say exactly how these mandatory targets and financial incentives for fuel suppliers will affect commodity prices. However, it is essentialthat these policies formulated to increase biofuels are managed in a way which avoids distorting the availability of agricultural raw materials for food and animal feed."​ The Chancellor also committed the government to ensuring all new non-domestic buildings are zero carbon by 2019. However, the FDF said this left unanswered questions on which buildings would be covered. SMEs ​Alongside Budget 2008, the Government is publishing Enterprise: Unlocking theUK's talent​ and Innovation nation,​ which focuses on helping small and medium sized enterprises, encouraging innovation and developing science skills. The new policy included aims to improve access to finance for SMEs, minimising the impact of regulation on SMEs, and development of enterprise education in secondary schools. Leech said: "The Budget provides some much needed help for SMEs, who are the backbone of the food and drink manufacturing sector. FDF is also pleased the Government recognises there is a need to close existing skills gaps in the workforce and safeguard the future of the country's science and innovation capabilities."

Related topics: Market Trends

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