Food Price Inflation and Food Banks

Debate between Beth Winter and Matt Rodda

Wednesday 17th May 2023 Westminster Hall

[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.