Corporate Profit and Inflation

Ian Byrne Excerpts

Tuesday 16th May 2023 Westminster Hall

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

It is an honour to serve under your chairship, Sir Mark. I thank my hon. Friend the Member for Leeds East (Richard Burgon) for securing this incredibly important debate.

Two thirds of my constituents in West Derby are having to cut back on hot water, heating and electricity. One in three in my city are in some kind of food poverty, and 3.7 million children across the UK—one in five—have eaten less, skipped meals or gone without meals for an entire day. Meanwhile, Unite the union’s analysis of the industries that together have the biggest impact on inflation has found industry profit increases of over 20,000% for the big eight shipping firms, 366% for oil refineries, 255% for giant agribusiness food corporations and 84% for the big four energy companies. While many of my constituents have been forced into fuel poverty, oil and gas company BP has made a record $28 billion profit and doubled the salary of its CEO to £10 million. The immorality of this position—leaving the most vulnerable hungry while corporations are awash with profits—shames this place.

Let me touch on corporate profits and food poverty specifically. In the past 12 months, there have been extreme rises in the cost of staple foods: cheese is up 50%, two pints of milk is up 40%, eggs are up 28% and white sliced bread is up 21%—and there are locks on baby formula milk. Tragically, the rises affect the poorest households most of all, because they spend a larger percentage of their household income on food. The poorest fifth of the population would need to spend 43% of their disposable income on food to afford the recommended healthy diet in the Government’s “Eatwell Guide”. With so many other pressures, that is simply not achievable.

Unite the union highlights:

“Despite the rise in wholesale prices, Tesco, Sainsbury’s and Asda still managed to increase their profits by an astonishing 97% in 2021…Profiteering is happening right along the food supply chain”.

Eight of the UK’s top food manufacturers made a combined profit of £22.9 billion—up 21% since before the pandemic. The four giant agribusiness corporations ADM, Bunge, Cargill and Louis Dreyfus made $10.4 billion, which is up 255%—absolutely staggering profits.

In the food industry, the workers who grow, distribute and supply our food are left unable to purchase the very food that they produce. The latest survey from the Bakers Food and Allied Workers Union found that four in 10 food workers are forced to skip meals, and over 60% of respondents said that their wages are not high enough to meet their basic needs. One worker wrote:

“I don’t have running hot water, so I can’t wash my hands thoroughly. Either trying to keep warm in bed or running on the spot. Staying at work longer to keep warm.”

In a letter I received this week, the Minister for Food, Farming and Fisheries told me:

“It is not for the UK Government to set retail food prices nor to comment on day-to-day commercial decisions by the companies.”

That is a cowardly response.

However, at a recent Environment, Food and Rural Affairs Committee session, we heard evidence from the United Nations special rapporteur on the right to food, who told us that corporations have a significant amount of power in markets, and there is not much being done to hold them accountable. Food prices are at the mercy of speculation, but Governments have the tools to stabilise prices. The inequality and levels of profiteering we are seeing are not inevitable. They are a result of a political decision by this Government—a Government that could intervene if they had the political will to do so.

It is one of the gravest and most frightening crises seen in our lifetimes, and yet many of my constituents tell me that they feel abandoned and ignored by a Government who are supposed to protect them. The situation cannot go on. I urge the Minister to heed the advice of the United Nations special rapporteur and use the tools to tackle this injustice. Do not leave the most vulnerable at the mercy of the greed and morality of those corporations.