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Budget speech: What food experts say

23 June 2010

From the FDF and Improve to Lloyds TSB's relationship director for the food sector, and the Regional Food Group for Yorkshire and Humber, everybody is buzzing over the Chancellor's speech

Commenting on yesterday’s budget announcement, The Regional Food Group for Yorkshire and Humber Chief Executive, Jonathan Knight says: “As expected, this budget has been tough, reflecting the current economic times. We welcome the Government’s commitment not to introduce VAT on food during its period in office.

“It is further good news for our cider-producing members, who will be raising their glasses as the hike in tax which Labour proposed is scrapped.

“Delaying the 2.5% VAT increase until January 2011 should encourage consumer sales momentum in the run up to Christmas, which will help the food and drink sector, especially independent retailers and producers.

“However, it is set to be a difficult time ahead regarding public sector cuts, with possible knock-on effects for the regional food and drink sector as average local food buyers will have less disposable income.

“There has been no clarity on the specific support to businesses in the region, besides the creation of a Regional Growth Fund from 2011, and some loud hints that RDAs will need to transform into some form of Local Enterprise Partnerships in order to continue their business development functions-this detail is eagerly awaited.

“In the meantime, The RFG continues with a full programme of support events for our members, showcasing and championing our great regional produce. In addition, we are launching the 2010 Guide to the region’s food and drink businesses, which will be available in regional retailers and from our website, and already planning for the highly acclaimed ‘deliciouslyorkshire’ Awards later this year.”

Guy Reeves, Relationship Director - Food, Lloyds TSB Corporate Markets comments: "Today's emergency Budget, which was headlined by the phrase ‘enterprise led recovery’, should provide encouragement for UK businesses. The Budget contained a number of measures that are industry friendly, including a reduction in Corporation Tax and a reversal in the increase in employer National Insurance Contributions. In addition, provision is made for SME support through an increase in the Enterprise Finance Guarantee and Regional Growth Fund."

Also responding to the budget was Melanie Leech, director-general of the Food & Drink Federation (FDF): “We recognise this is a tough budget addressing serious issues. No one welcomes spending cuts or tax increases for their own sake. But we're relieved the chancellor has confirmed that most foods will continue to be zero rated for the life of this Parliament. We'd argued against ending existing zero ratings as such a move would disproportionately impact the poorest in society, dampen consumer spending and fuel inflation – and are pleased he's listened to our arguments.''

Meanwhile, the head of the UK’s food and drink sector skills council says George Osbourne’s first budget as Chancellor had lain down the gauntlet to industry to work the country’s economy back to prosperity.

Jack Matthews, chief executive of Improve, said: “Everyone knew there would be pain in this Budget. But I agree that this is a Budget which rewards work and encourages enterprise. What I see is the government handing down a challenge to all of us, collectively and individually, to get the economy moving again in the way we work.

“One thing the coalition clearly believes in is the value of investment in skills in order to make the economy more productive and prosperous. Despite all the cuts, it has committed £3.5 billion this year to the Skills Funding Agency to support training places, of which £550 million will be used directly to fund Apprenticeships and a further £757 million to fund other forms of work-based learning.

“I welcome the government’s commitment to promote greater employer engagement in skills and to prioritise vocational and work-based qualifications which employers themselves value. I have long argued from my own experience in industry that employers are the only people who know how to make training work for their business, and that their input is therefore indispensible when you are looking to drive innovation, leadership and sustainable, efficient working through skills.

“As such, I agree with the principle behind joint investment in skills between the public and private sector. I think employers have always been prepared to put money into workforce development where they can be confident of getting returns on business performance. The sector skills councils have a crucial role here both in ensuring employers’ voices are heard and in selling the benefits of skills and training.”

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