Food Price Inflation and Food Banks

Beth Winter Excerpts

Wednesday 17th May 2023 Westminster Hall

[Carolyn Harris (in the Chair)]

I will call Beth Winter to move the motion and then the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates.

[Beth Winter (Cynon Valley) (Lab)]

I beg to move,

That this House has considered food price inflation and food banks.

It is a pleasure to serve under you, Mrs Harris. I am pleased to be able to put some points to the Minister for Food, Farming and Fisheries, the right hon. Member for Sherwood (Mark Spencer).

I would like to raise a number of points, so I hope the Minister will indulge me, even if I do stray into the Treasury brief. I sought this debate because of the growing concern about food price inflation and food poverty. It is a year since I conducted a cost of living survey in my constituency about people’s experience of the cost of living crisis. There was a major concern about the growing cost of energy—not then at its peak, but still a dominant issue at the time. The survey also showed that people were worried about the cost of food, with 36% of respondents, including 61% of those on benefits, skipping meals last year. Almost 50% of those asked said they would be cutting down on essentials, such as food, in the months ahead. It seems that that has been the case in the past 12 months.

The Trussell Trust food bank covering Merthyr and Cynon Valley, which opened in 2011, has been helping families since that time. In the past year, it provided a record 2,800 emergency food parcels to people in Cynon Valley—a 31% increase. That included more than 1,000 emergency food parcels for children, which is a disgraceful 33% increase. There has been a long-term increase in need over the past five years. Food banks in Cynon Valley have seen a 61% increase in need since 2017-18.

The Trussell Trust is not the only local food bank. The Salvation Army food bank in Aberdare has helped more than 1,600 people in the past year, and the numbers are growing. Those people often live alone, are elderly or have lost their jobs. Running food banks is getting harder and they need more support, including from local supermarkets. A volunteer at another food bank at Fernhill in my constituency recently told me about how they had to provide kettle packs—yes, kettle packs—for those reliant on a kettle when they cannot afford to cook. Women also regularly come in to pick up sanitary products.

The rise in food bank use can be seen across the United Kingdom. The Trussell Trust reported that it gave out 1.3 million emergency food parcels in 2017-18, but almost 3 million in 2022-23. What are the reasons? The Trussell Trust has said that the growth in the need for food banks is about a shortage not of food but of money: a long-term cut in pay, a long-term cut in social security, and bills accelerating ahead of incomes. That is a political choice.

Between April and August 2022, over half of food banks surveyed by the Independent Food Aid Network found that 25% or more of the people they supported had not used their services before. They are increasingly people in work in social care, the public sector and across sectors. Work does not pay, and that is the reason for in-work poverty.

[Mary Kelly Foy (City of Durham) (Lab)]

I thank my hon. Friend for securing this important debate. Yesterday it was reported that desperate parents are having to steal baby formula to feed their children. It is seen as stealing but, of course, it is survival. Does she agree that the Government should consider price controls on essential items such as baby formula?

[Beth Winter]

I certainly do. My hon. Friend makes an extremely important point—we are the fifth richest nation in the world and people are being forced to take such steps. It is absolutely disgraceful and shocking. I will come to food prices in a moment, so I thank her for that intervention.

It was also only yesterday that the Office for National Statistics reported another monthly fall in real-terms pay. For 17 months in a row, pay has risen below the rate of inflation. That is a pay cut. Indeed, the TUC says that workers have lost more than £1,000 from their pay over the last year. What is clear—beyond doubt—is that wages are not driving inflation; if anything, they are a drag on it.

In a new poll for More in Common UK published today, 75% of those polled said that the cost of living is one of the biggest issues facing the country and 45% said they are shopping around more for groceries; when looking at those bills going up, it is increasingly the weekly food shop. The Office for National Statistics reported earlier this month that food and non-alcoholic drink inflation was at 19.2% and that around half of adults are buying less food when they go shopping.

[Matt Rodda (Reading East) (Lab)]

I am grateful to my hon. Friend for giving way and for her work on this important issue. One piece of analysis has even shown that the prices of some basic food items are rising by 30%. My hon. Friend is right about the scale of the challenge facing many families. Is she aware of the pressure facing those in work in addition to the pressure for those on benefits? In my area, many people living in the suburbs—people who have jobs—are now attending food banks to keep their families from falling into terrible poverty.

[Beth Winter]

Yes, I am very aware of those people. I work closely with food banks in my community, as I know other Members do, so I know that there has been a significant increase in the number of people in work who are accessing food banks, which is completely unacceptable. It is unacceptable for anybody to be using them.

Why are prices going up? We have to be clear that there are multiple causes. Droughts, climate disaster, fuel costs and the Ukraine war have all had an impact. However, as Unite the union has set out in real detail in its research on profiteering, which looks at the profits of companies in the FTSE 350, all of this has been made worse by profiteering along global supply chains, from agribusiness multinationals to high street supermarkets. It is not just Unite saying that. The European Central Bank recently said:

“Profit growth remained very strong, which suggested that the pass-through of higher costs to higher selling prices remained robust.”

The top eight UK food manufacturers made profits of £22.9 billion in 2021, with both profits and margins up 21% on 2019, with Nestlé, Mondelēz and Unilever all benefiting from double-digit growth in profit margins. In the supermarket sector, Tesco, Sainsbury’s and Asda—the top three UK supermarkets—nearly doubled their combined profits to £3.2 billion in 2021 compared with 2019.

Supermarkets are turning over hundreds of millions of pounds and handing dividend payments to wealthy investors, who are obviously not the people struggling to eat. In 2021-22, a total of £704 million was paid by Tesco in dividends and last July the company also paid shareholders £1 billion in its share buyback scheme.

The problem is that people who are reliant on low pay and social security are funding these exorbitant dividend payments and I really do not understand how the Government can justify that; I am interested to hear what the Minister has to say. People who cannot even afford to go to supermarkets are going to food banks. This is a crisis—a cost of living crisis—and it should not be allowed. We have taken action to control energy prices. When are we going to take action on the cost of food?

In Wales, where the Labour Government are in touch with ordinary people’s concerns, we are doing what we can, despite our underfunding by the UK Government. The Welsh Government are rolling out universal free school meals, which are now available in reception and years one and two, and they have a timetable to roll them out to all children in primary school. Think how much more quickly they would be rolled out in Wales if there was a fair, needs-based funding formula for central funds to the Welsh Government.

[Ian Byrne (Liverpool, West Derby) (Lab)]

I thank my hon. Friend for the fantastic work that she does in her community on the issue. Does she agree that the Minister should follow Wales’s lead and introduce universal free school meals? The Government should introduce a free school breakfast and lunch for all children in state education and, alongside that, enshrine a right to food in law, so that all children and adults have enforceable food rights, and we tackle the scourge of hunger in our communities.

[Beth Winter]

I congratulate my hon. Friend on the sterling work that he does on the Right to Food campaign in Liverpool. I totally agree that the UK Government need to follow the Welsh Government’s lead and roll out universal free school meals to all children. I thank him for his intervention.

Universal free school meals could be rolled out across the UK if supermarkets and suppliers were not allowed to pay such enormous dividends to shareholders, and instead paid a windfall tax. Imagine that—food retailers taxed to provide free school meals. It is an obvious thing to so. Elsewhere around the world, other Governments are taking action. In France, the Government have announced an anti-inflation trimester, during which supermarkets are expected to make discounts on food that will cost them, according to the French Prime Minister, hundreds of millions of euros. That appears to be a voluntary scheme. Carrefour and Casino supermarkets have made cuts. We need more information on the scheme’s impact and the benefit for families, but I hope that the Government are watching and discussing the matter with their French counterparts. Will the Minister respond to that point? Another example is Switzerland, where food is subject to price regulation. Prices there grew at a rate of 4% in December last year, compared with nearly 12% in the US and nearly 17% in the United Kingdom. Have the Government considered how Switzerland regulates its food pricing?

Sadly, this Tory Government are not taking action. I looked at the outcomes of yesterday’s food summit, which was renamed the Farm to Fork summit—no reference whatsoever to food inflation or food poverty. I note that the union most heavily involved in the food sector and agriculture, Unite the union, and the Bakers, Food and Allied Workers Union were not invited to the summit. Why?

The Environment, Food and Rural Affairs Committee

“is to investigate how profitability and risks are shared through the food supply chain and the existing government system of monitoring and regulation of these.”

On Monday, the Competition and Markets Authority announced

“the stepping up of our work in the grocery sector to understand whether any failure in competition is contributing to grocery prices being higher than they would be in a well-functioning market.”

Will the Government commit to learning from those processes, and will they look at other Governments’ interventions in their food markets? The crisis is such that the Government must act now, even while those investigations go on.

What should the UK do? First, we must inflation-proof incomes. Many of us on the Opposition Benches have been calling for that for a long time. That means an end to the Tory low-pay agenda that cuts public sector workers’ pay in real terms. Secondly, the Government should adopt the Trussell Trust and Joseph Rowntree Foundation’s call for an essentials guarantee. That would mean an independent process to determine the level of that guarantee, ensure that universal credit meets that level, and ensure that deductions do not take it below that level.

Thirdly, we need a windfall tax on food profits for supermarkets and, where possible, suppliers. If we can have such a tax on fossil fuel suppliers, why not food suppliers? It is incumbent on the UK Government to engage with that proposal, for which they have set a precedent, given what they have done on oil and gas. The tax revenue could be used to expand the provision of free school meals, as my hon. Friend the Member for Liverpool, West Derby (Ian Byrne) just said. Fourthly, we need controls on food speculation, as the former shadow Chancellor, my right hon. Friend the Member for Hayes and Harlington (John McDonnell), said in a debate yesterday. Finally, have the Government explored any mechanisms for a price ceiling on a core basket of goods? People are struggling in this cost of living crisis, and this Government are standing by as they suffer.

I will finish with some personal commentary. Prior to entering this place, I volunteered at a local food bank for a long period. It will never leave me: when I looked into the eyes of the people coming into the food bank, I saw despair, but also a sense of embarrassment and shame at having to access a food bank in the fifth-richest nation in the world. It is an absolute disgrace. The answers are there; this is a political choice. It is extremely urgent that immediate action be taken by the UK Government to resolve this issue.

--- Later in debate ---

[Mark Spencer]

I am not privy to the whole guestlist, but of course there is a limit to the capacity in No. 10 Downing Street. There are lots of people who would have liked to be there whom we were not able to accommodate. However, it was important that we drew together industry leaders—retailers, processors, and primary producers—so that they could work together on delivering innovation in the sector, and so that they could try to lower food prices and not only make our great British food producers competitive across the world, but benefit our constituents.

Following that summit, we announced a package that includes a broad range of actions to strengthen the resilience of our farming sector and drive long-term sustainability. That includes a new set of principles to protect farmers’ interests in future trade deals, more funding to help producers export, plans to reduce red tape for farmers looking to diversify their income streams, and making it easier to build glasshouses in the UK.

Last week, the Chief Secretary to the Treasury met supermarkets to discuss the cost of food, and the Chancellor is meeting them again shortly to discuss how we ensure that consumers have access to a range of affordable food, in recognition of the pressures that people and producers are feeling. We have also provided significant support this year, worth an average of £3,500 per household. That includes direct cash payments to the most vulnerable households, as well as our uprating benefits and the state pension by 10% in April.

Food banks are a great example of the generosity of spirit of communities across the country. The Government do not have any role in the operation of food banks, as they are independent, charitable organisations that bring people in local communities together to support one another. However, recognising that good work, the Government will provide over £100 million of support for charities and community organisations in England. It will be targeted at supporting critical frontline services for the most vulnerable people—services that are struggling to meet increased demand.

[Beth Winter]

The Minister has not yet addressed the idea of a windfall tax on supermarkets. Are the Government looking at that? Is the Minister saying that food banks are acceptable? That is what I took from what he just said. Surely we should be ending the use of food banks in the fifth-richest nation in the world. It is appalling that they exist.

[Mark Spencer]

I am grateful for the hon. Lady’s intervention. What I was saying was that I recognise the great work that those in food banks do. I recognise the work that the charitable sector does to support the most vulnerable. I am not saying that food banks should be the model for the future; I am saying that the great work they do should be recognised. The best way to get out of poverty should be through work and opportunities to earn a fair wage, so that people can afford to buy their own food.