Awaiting a new regime…

Dr Clive Black

May 9, 2024 9:03 am
Awaiting a new regime…

The Tories are a spent force. The damage done by the lazy and eccentric Boris Johnson and the wholly naive and incompetent Lis Truss are too much for an admittedly competent but seemingly unelectable Rishi Sunak to overcome.

Long in the tooth, ill-disciplined, at times wholly illogical e.g., Michael Gove’s decisions not to grant Marks & Spencer the ability to regenerate its west Oxford Street store, the Conservative Party are destined to be ousted at the next UK General Election, which must take place by January 2025, most likely coming in October/November 2024 with a summer sprint seemingly dismissed by the Prime Minister following the May election rout.

Quite how the next British political regime will look remains to be seen. Some political commentators anticipate a landslide for Sir Kier Starmer’s Labour Party, notably extrapolating the carnage for the Tories of the May local elections plus the heavy beatings in by-elections too. Others suggest more caution, pointing out that many folks vote differently at a General Election, most notably eschewing the independent candidates in favour of national parties.

And then there is the SNP and quite what fall-out there may be from its recent shambolic shenanigans plus its dreadful running of a once great nation. As such, could a hung parliament still prevail, which may give lunatics like the shallow Sir Ed Davey and his Liberal Democrats some sway?

All will be revealed in forthcoming months, but it is not unreasonable to assert that the good people of the United Kingdom are sick and tired of the present crowd. Hence, I sense that there is a more than reasonable chance that Starmer et al will be forming the next Government and, assuming more competence than the present shower, maybe a couple of terms at least; frankly, the likes of Gove, Rees-Mogg, Truss et al deserve no less.

If so, what may Starmer and his red carnations mean for the British food system? Well, first and foremost, it is their term to inherit an economy that has notable constraints, namely high levels of national debt, with substantial corresponding service costs, as well as high tax takes, which arguably limits room for manoeuvre for any new government from a spending perspective; in this respect, the Tories have been unlucky in having to cope with both the pandemic and the Ukraine War, events that would challenge any regime.

Starmer may be a little more fortunate in taking office as the UK interest rate cycle nudges down, so easing some pressure off government debt service costs as well as the borrowing charges for businesses and households alike. Whilst all this is so, wiggle room feels constrained unless he and Ms., Reeves can convince gilt and sterling markets that public expenditure can rise if it is targeted at investment in capital goods and people alike: there is a strong argument for doing so, if they do what is said on the tin, but that is a big if…

The Labour Party, if elected, would be blessed too by inheriting a strong UK labour market, where employment participation is high and unemployment low. That said, there is a problem with people of working age not participating seemingly due to ill-health, whilst immigration fills necessary voids in both public and private markets. Hence, any new government’s policies on the labour process, including worker rights, immigration and the benefit system, will be important for business, where worry lines are presently evident.

Brexit has been a key event in modern British history and what Labour plans for the relations with the EU and, particularly, Ireland will be important for the food system in terms of trade flows, standards, bureaucracy, and costs. The Party speak to no joining of the Single Market but maybe there will be less friction compared to a Tory party where the right wing, along with the Reform Party, which could really put the boot into the incumbent governing party in the election, have an especial dislike.

One area where immense benefit could emerge for the British food system but alas one has to be cautious, is the improvement in the capability and performance of agencies of the state, which from the Royal Mail to OFWAT, the Bank of England to the ONS, are a real headwind to progress. Unfortunately, the technocracy feels very self-perpetuating, and one cannot but be quite pessimistic that Labour can change this cabal for the better, not least encouraging them to turn up for work!

A new government does, however, have the ability to think differently about the British food system, most fundamentally from the perspectives of improving security of supply and what it takes to do so. In this respect, I would encourage Sir Kier to read the Kendall Report, commissioned by the Government of Northern Ireland, a region where agri-food is so important, to commence a programme of work around producing more from land where animal welfare and sustainability also improve.

Such an agenda is exciting because it can draw in the UK’s world-class research institutes and create a basis to fundamentally improve our food system from farm to fork centred around data and analytics. A strategy around a generation of improving soil, air and water quality whilst reducing the UK’s dependency upon imports, which would be domestically value adding and good for the trade balance, feels compelling. Doing so also needs a functioning planning system…

Noises are being made on this front, not least by Sainsbury’s excellent CEO, Simon Roberts, who at the City Food lecture, despite being subject to parochial small-minded interrogation, set out an agenda, embracing the need for sector wide collaboration and a Minister for the Food System, reporting into a new Prime Minister. Such a stance is compelling…

It is time for a change at 10 Downing Street, where, in truth, few will be sorry to see the Conservative Party ousted. However, change for change’s sake rarely delivers something better. Hence, there is the need for improved ministerial capability as well as that of the civil service and the many public agencies.

Realism may be sensible in this respect. Whilst so, fundamental political change does represent an opportunity for the food system in particular to engage with a new Government in a strategic manner that could set the context for a generation of investment, improved analytics, expansion and so growth, growth that the Labour Party prattles on about, growth to which the biggest industrial system in the country could materially contribute.

Now there’s a thought…

Dr Clive Black

Senior Advisor

Coriolis Consulting

May 2024.

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