The British Retail Consortium (BRC), along with the National Farmers Union, UKHospitality and seven leading UK retailers, have made fresh calls for reform to the Apprenticeship Tax Levy.

In a letter to the government, the organisations – including Tesco, Morrisons, and Asda – urged it to reform the levy to address “critical and persistent” supply chain labour issues, which it said would foster “greater resilience” and support food security.

The letter to minister for skills, apprenticeships and higher education Roberto Halfon stated that food businesses have been suffering from ongoing supply chain challenges due to several factors including the UK’s departure from the EU and resultant lack of access to labour from the bloc, and the labour market contracting during the pandemic.

“As a result, roles have become increasingly hard to fill and a significant skills shortage has emerged, which has left our industry with employment gaps placing upward pressure on the prices customers pay,” the letter read. “Food businesses face persistent shortages of roles across the supply chain, including farming, food preparation, logistics, warehouse operations, quality control. As a result, labour costs are rising – in turn creating inflationary pressure – and UK food security is undermined."

BRC chief executive Helen Dickinson described the levy as nothing more than a tax on business that must be reformed.

“Businesses across the food supply chain have long been calling for reform to the Apprenticeship Levy,” she said. “The government should stop dragging its feet so businesses can upskill our workforce, help safeguard food security in the UK, streamline costs and respond to the needs of the economy.”

Hayley Tatum, senior vice president - chief people and corporate affairs officer at Asda added that reform to the levy would provide greater flexibility in the schemes where levy funds could be distributed.

She said: "Asda would welcome reform that would make it easier for businesses to spend Levy funding as intended – offering new opportunities across the country as well as upskilling the existing workforce.”

Agreeing that reforms would help safeguard Britain's food security in the future, Tesco chief executive Ken Murphy urged the government to "look again" at the practical barriers to skills development under the current system, stating it was "not delivering for food businesses or their employees".

Earlier this year, the BRC described the current levy as “broken” and said the current system requires businesses to contribute hundreds of millions of pounds into a pot, but it only allows these funds to be “spent in an overly restricted way”.

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