THE UK Government has been slated for its “weak approach” to introducing a food price cap which would only involve a voluntary agreement with supermarkets.
Downing Street is understood to be drawing up proposals to advocate for charging the lowest possible amount for some basic products like bread and milk after food prices rose 19.1% in the year to April.
As part of the proposals – which are said to be at a “drawing board” stage - supermarkets are expected to be allowed to select items they would cap and would only take part in the initiative if they want to. The scheme would be modelled on a similar agreement in France.
The plans have been criticised by the British Retail Consortium, which said the measures would not make a “jot of difference” to pricing and warned they could thwart efforts to cut inflation.
Many MPs have also compared the plans to pricing controls introduced by Conservative prime minister Edward Heath in the 1970s.
Left-wing Labour MP and ex-shadow chancellor John McDonnell – who is part of the Socialist Campaign Group of Labour MPs – said the plan was “weak” and called on his own party to fill a “policy vacuum” of proper controls on food prices.
He told The National: “The Government’s weak approach of a very limited voluntary scheme will not put food on the place for the huge number of families struggling to get by.
“We need a straightforward price control of a basket of basic foodstuffs.
“This is a perfect opportunity for the Labour Party to fill this policy vacuum.”
He added in a tweet: “[I’ve] been calling for price controls on basic food stuffs & rents for 18 months — Labour has an opportunity now to seize the initiative on controlling prices & rents.”
Downing Street sources have stressed that there are no plans for a mandatory price cap.
“The Government is not considering imposing price caps. Any scheme to help bring down food prices for consumers would be voluntary and at retailers’ discretion,” a Government spokesperson said.
McDonnell’s Labour-left colleague Richard Burgon also tweeted about the plans saying: “I first called for this over a year ago and did so again in Parliament earlier this month.
“The Government must do this. And without any further delay.”
Been calling for price controls on basic food stuffs & rents for 18 months. Fear a voluntary agreement limited to only a few foods will just be an ineffective publicity stunt. Labour has opportunity now to seize the initiative on controlling prices & rents https://t.co/Dq4PnvtZ5s
— John McDonnell MP (@johnmcdonnellMP) May 28, 2023
In his speech in Parliament, Burgon highlighted a poll last year that stated 71% of voters support price caps that place limits on what companies can charge for certain goods and services. This included the overwhelming majority of Conservative Party supporters.
He said in a piece for Labour Outlook that “price caps would mean we are putting the right of people to eat and to be warm ahead of corporate profits."
The Scottish Greens said the plans by the Tory Government were the clearest sign yet it had “lost control of the economy”.
Green MSP Maggie Chapman told The National a voluntary system of price capping “would not cut it”
She said: “If ever there was a sign that the UK Government has lost control of the economy, trying to gerrymander cost controls on our stores and supermarkets has to be it.
“Retailers must not be allowed to profiteer from food and essentials while the nation starves or go down the road of the big five energy companies who put profit before people.
"Price controls should be part of the solution, but a voluntary system will not cut it. Any caps must be matched by a focus on getting money in the pockets of the millions of people who badly need it.
“That means higher wages, a social security system that supports people rather than punishing them and more progressive taxation to fund it. And we must make sure that producers are not forced to accept unsustainable payments for the food they produce.
"In the longer term it means fundamentally changing the economy and the assumptions that underpin it, to ensure that it works for people and for planet.”
The proposals come after Chancellor Jeremy Hunt backed interest rate hikes – even if they risk plunging the UK into recession – in order to combat soaring inflation.
Although down from 10.1% in March, the Consumer Prices Index of inflation remained stubbornly high at 8.7% in April, while food is still alarmingly expensive.
Andrew Opie, director of food and sustainability at the British Retail Consortium, said: “This [a voluntary price cap] will not make a jot of difference to prices.
“As commodity prices drop, many of the costs keeping inflation high are now arising from the muddle of new regulation coming from Government.
“Rather than recreating 1970s-style price controls, the Government should focus on cutting red tape so that resources can be directed to keeping prices as low as possible.”
