Businesses in the fresh produce trade are likely to suffer with a depleted government structure before they can break free of legislation and exert flexibility in the next few years, market analysts have warned.
The uncertain and decreasing budget of DEFRA following last week’s spending review is likely to make any interaction with the public sector extremely difficult in the short term.
This week prime minister David Cameron attempted to rally private industry at the CBI conference saying he would take a “forensic, relentless approach” to ensuring growth and allowing new companies to thrive.
But Grant Thornton director of agriculture Gary Markham told FPJ it would be some time before legislation could be passed to free businesses from the shackles of bureaucracy.
There are high hopes that DEFRA’s Task Force on Farming Regulation, chaired by Richard Macdonald and due to report in the new year, will reverse the trend towards red tape.
“A lot of bureaucracy has crept into horticulture over the last few years and if that can go, that will be key,” Markham said. “Because we have such a large infrastructure of bureaucracy it’s going to be difficult at first because they are not going to get through all the work with limited resources. There will be pain on the way because the infrastructure will not be supporting it due to costs.”
Markham also said government pledges to use British produce in procurement contracts were merely “lip service” and that it would be under huge pressure to choose the cheapest option.
The British Retail Consortium (BRC) said the government had got the spending review “broadly right” and was making “the right noises” about regulation.
BRC spokesman Dale Atkinson said: “With VAT rising from 17.5 per cent to 20 per cent in January the government needs to make the right regulatory environment to retain the fragile consumer confidence we have seen and maintain margins.”
This week Chancellor George Osborne welcomed the positive news that GDP grew by 0.8 per cent in the past three months and Standard & Poor’s confirmed the UK’s AAA credit rating.
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