Liz Truss – 2016 Speech to the Food and Drink Industry Dinner [Warning of Dangers of Brexit and Leaving Single Market]

The speech made by Liz Truss, the then Secretary of State for Environment, Food and Rural Affairs, on 19 May 2016.

Thank you very much Fiona. It’s a great pleasure to be here at the Food and Drink Federation dinner. You’re a fantastic organisation and this is a fantastic part of our economy. Food and drink is our biggest manufacturing sector. It’s bigger than cars and aerospace put together. We had a celebration at Number 10 last week where we have these fantastic posters up and we had food and drink manufacturers and producers from across the UK. And the Prime Minister gave a speech at the end of the event and he said that he knew that food and drink was our largest manufacturing sector, because I have mentioned this at Cabinet on several occasions.

So I think the message is getting through to my Cabinet colleagues, but as we say in politics, when people are starting to get bored of a message, it’s just when you need to start repeating it even more. So I’ll be saying it even more and making that case right across our government, but also right across the wider economy, across the media, because food and drink deserves to have an even higher profile than it’s got at the moment. We have some of the world’s best chefs who are all involved in the Great British food campaign whether that’s Ken home or Angela Hartnett.

We have some of the most innovative companies and we produce more new products every year in food and drink than France and Germany put together and we also have some of the world’s best farmers producing fantastically high yields with the best animal welfare standards in the world as well. Creating a brilliant landscape which we all enjoy, whether it’s the Lake District where I’ve been today, whether it’s the South Downs National Park, and we should be tremendously proud of what we do and that is why we launched the Great British food campaign this year. That’s also where we introduced the great British food unit, which is all about exporting our fantastic food right around the world.

Now it’s a bit difficult before the 23rd of June, not to mention the EU referendum. I’m sure people in this room would be horrified if I didn’t talk about it. But I do think that the decision on the 23rd of June probably will have a greater impact on the food and drink industry than it would have on any other parts of the economy. That’s because if we look at trade, the food and drink industry exports 60% of all its products to the EU. If we look at particular areas like lamb, 40% of all the lamb that is produced here in the UK goes into the EU, into the EU market that represents 97% of lamb exports. Now why is that? Well, it’s because that we have the single market. And what we know is that countries outside the single market, whether it’s the US where I was recently or whether it’s China, still don’t allow quite a lot to our fantastic British food stuffs into those markets.

And of course the great British food unit is working to get entry for new products. But that is why that European market is so precious. Because we share the same regulations, we share the same rules over things like food safety, over animal health and welfare, over bottles. And the white whiskey industry and I’ve been doing a bit of a UK tour recently, the whiskey industry will tell you how important it is that because we share those regulations over bottling labelling. They can simply export their products to Paris just as easily as they can sell them in a supermarket in Preston. Now, if we were to leave that EU single market, what that would mean is that those products would face additional costs and getting them into those markets. It would mean in some cases that we could see markets closed and I’ve had a lot of people say to me, ‘well surely the European Union won’t close its markets’. But it’s fairly recently that of course the French closed its markets to UK beef, and we had to fight in the European Court of Justice to get British beef back on French menus because there is a policing mechanism in the European single market to make sure that if a product is complying with those European rules that we’ve all agreed, then we are able to sell it. So that is a very important message.

And this campaign has been dominated by some quite strong statements, some quite major warnings. But what I think is really important is we get the message across to people and that’s the people in your companies. It’s the people that we all work with, it’s the people in the entire food chain, which employs a massive amount of people across this country, that we get the message across about just how difficult it would become to do business. If we are a country  like Norway, we’d have to fill in 50 boxes every time on a form every time we went to export something. In products like agricultural products, there’s a regime of quotas and tariffs.

I know how difficult it is getting products into markets like the US and China. DEFRA has just filled in an 1,000 page form which is one part of an eight stage process to get British beef and lamb and we’ve still got to get a resolution passed by Congress to allow that British lamb into the market. So I think we’ve got to be very careful about taking that single market for granted and being outside that single market, and the single market isn’t something that is a sexy, exciting thing to explain. But it is really crucial to the amount of growth we’ve seen in food and drink exports over the past 40 years. It is really crucial to that.

The second point I want to make is about investment. And I’ve just been over in the US talking to some of our major investors. We’ve got some of our major investors in the UK economy here in this room companies like Nestle or Mondelez putting huge amounts of research, of expertise, of new capital and machinery into our economy, improving the productivity of our food and drink sector which is so vital and I’m delighted that the Food and Drink Federation is focusing on productivity. We know that’s a challenge for the UK economy.

Now the reason many of those investors want to invest in the UK market is because we have access to 500 million consumers. Yes, the UK is a hotbed of innovation, but we are also a passport into that wider market. Now I’ve spoken to many investors who are saying that they would be concerned if they invested in the UK, whether it’s in R&D, whether it’s in capital to improve our productivity, whether it’s in new production, and I want to see more investment in areas like dairy processing capacity, I think we’ve got massive potential here in the UK. They will be worried about whether or not those investments continue to have access to the single market. And the Out Campaign has been very clear. They said they don’t want to be part of the single market. I think that’s a real worry for investment and I do want to see more capital investment in food and farming.

And what I would say to you is there are some people in this room who said to me, yes, we are concerned about this, but we don’t want to necessarily take a position. I can understand that as businesses, but I do think it’s in all of our interests to communicate the real impact on the ground. The real impact this would have on jobs on livelihoods, because what we know is less trade would mean fewer and fewer investments. It will mean fewer jobs, and that will feed through to people’s incomes. And that doesn’t just affect you and me in this room, that affects all of us in the overall economy. So even if you’re in a company that doesn’t export, the company that does export will be buying less of your services. And I think that’s the message we really need to get across in the closing weeks of this campaign.

But I have great faith in the British people. I think the British people are sensible people. They understand fundamentally, that economically Britain will be better off staying in a reformed EU. I’m very grateful for the Food and Drink Federation publicly coming out and saying that, of course the National Farmers Union have also come out and said that. I think getting that message across is really important over the next few weeks.

But what I want to do is following, I hope an in vote, is to really focus on what we can do next to bring this industry up to the next level, to really make sure this industry, the biggest manufacturing industry in our economy, an industry with huge potential, because we know the demand for food is growing across the world. We know demand for high quality, healthy, innovative food is growing across the world. I think we can do even more.

So one of the things we’re focusing on is apprenticeships. At the moment I think the average part of the economy has 2.3% of its employees in apprenticeships across food and drink. That’s just 1%, that’s partly because we have a lot of small companies in the sector. But I’m very pleased to say that recently the Department of Business has said the apprenticeship levy can be used to support jobs right through the food chain. So I think there’s a huge opportunity for food manufacturers, for supermarkets and for others involved in the food industry to support apprenticeships in primary production to support apprenticeships in other suppliers as part of that supply chain. And to really make sure we upskill the industry.

I had a recent round-table on International Women’s Day with some fantastic women farmers who were telling me that 75% of all the people they now need to recruit have STEM skills. This is a high skill industry, it’s a technically advanced industry. And what we need to do is get that message across to the wider public so that when people think about food, they don’t just think about the brilliant chefs, the fantastic products, our great protected food names, whether it’s Halen Môn sea salt, or whether it’s Scotch smoked salmon, but they also think about some of the innovation, the technology, the precision farming, the robotics that I saw at the Mr. Kipling factory, putting together those amazing cakes, which I’ve since been selling in Washington DC. We had an event in Washington and we were selling both curry and cakes. It was an interesting combination, but it went down very well with the Americans.

The final thing I’d like to say is about Brand Britain, because what has become clear to me when I travel the world is how appreciated the British brand is. The Union Jack on the pack really does mean something to people overseas. It stands for quality. It stands for heritage, it stands for safety, and it stands for innovation, and that is a really important message that we need to get across. We’ve been consulting extensively with our lawyers, and we can use the term British to promote our food, whether it’s by the government backed AHDB, which is the farming levy body, whether it’s by our campaigns which we run as a government, and I think what’s happening now is we’re seeing different parts of the food industry, the manufacturers, the farmers, the retailers, the hospitality industry, work much more closely together to get that message across about British food, both here in the UK, and in those overseas markets that have such huge potential.

It’s fantastic to be here today Fiona, to celebrate your success with you but also to say that I think we’ve got huge potential over this industry. Let’s get through the 23rd of June, on the right side of the argument and then we will be launching our food and farming 25 year plan. We will be having a major food business summit where we talk about how we’re going to get more investment into the food industry. And I think this can really be an exciting springboard for the future. Thank you.