Food Price Inflation

Jim McMahon Excerpts

Thursday 23rd March 2023 Commons Chamber

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

(Urgent Question): To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on food price inflation.

[The Minister for Food, Farming and Fisheries (Mark Spencer)]

I will respond on behalf of the Secretary of State. I draw attention to my declaration in the Register of Members’ Financial Interests.

We recognise that food prices have gone up. The recent increase in food price inflation was driven by upward price movements in eight of the 11 food categories. The three most significant price increases since February 2022 are oils and fats, at 32.1%; milk, cheese and eggs, at 30.8%; and non-classified food products, at 28.9%. While recent unseasonable weather in Morocco has also created some temporary supply disruption to fruit and vegetables, domestic retailers have held prices comparatively low compared with the rest of Europe, where increased demand led to some cases of 300% rises in the price of some vegetables.

A number of media outlets have reported that the recent shortage of some salad and vegetables has been the driver for the increase in food inflation in February, but that is not the case. The overall inflation rate increases have been caused by several factors. There are other categories where price increases have been greater than that of vegetables over the past year.

These high overall inflation rates are driven by high utility prices and pressures on global supply chains that are being felt across Europe and beyond. Commentators expect the rate of inflation both across the economy and for food and drink to be near its peak. The Government have put in place a number of measures to support households with prices, including committing £37 billion to support households with the cost of living; £1 billion of that has already gone towards help with the cost of household essentials.

Looking forward to April, the Government will be uprating benefit rates and state pensions by 10.1%. The benefit cap levels will also be increasing by the same amount in order to increase the number of households that can benefit from those uprating decisions. In addition, for 2023-24, households on eligible means-tested benefits will get up to £900 in cost of living payments. That will be split into three payments of around £300 each across the 2023-24 financial year. A separate £300 payment will be made to pensioner households on top of their winter fuel payments, and individuals in receipt of eligible disability benefits will receive a £150 payment.

Free school meal eligibility is being permanently extended to children from all families with no recourse to public funds. The Government have extended free school meals to more groups of children than any other Government over the past half century. We remain committed to ensuring that the most disadvantaged children continue to be supported.

We are also working closely with retailers to explore the range of measures they can take to ensure the availability and affordability of food, so while we recognise that this is a challenging time for consumers, we are taking a large number of steps to support people with the cost of living and I have great faith in the food supply chain, which has proven itself to be extremely resilient over the past few years.

[Mr Speaker]

I call the shadow Secretary of State.

[Jim McMahon]

I thank the Minister of State for his response, but this is a cost of living crisis driven in large part by the cost of food, so where is the Secretary of State? She seems to spend more time in the departure lounge than in her own Department at times. Mr Speaker, I feel like I am shadowing a shadow. Where is the Secretary of State on the most important issue at this point in her brief?

Once again, we are in the midst of a cost of living crisis, in which food inflation is playing a large part. If inflation overall is not curbed, the danger is that that will have an impact on the ability of people to pay their mortgages and we could see further interest rate rises as a result. There are serious questions about the Government’s approach to the cost of food and our food security. Some producers are reducing production and some are exiting completely. There are now 7,000 fewer food producers in agriculture than in 2019. Food inflation is up 18.2%, which is the highest in 45 years, and import costs to February are up 12.7%. The Minister knows—he is in the business—that those import costs today will be felt for months to come.

There has been warning after warning. Thanks to you, Mr Speaker, this is the second urgent question on food security, but where are the Government on farming payments, on labour shortages, on energy costs, on the costs of feed and fertiliser and on the impact of avian flu? Last time the Secretary of State was here, her advice to the nation was a call to arms to go out and buy turnips —those were her words of wisdom. That just does not wash. When will the Government realise that this is a crisis of their making and they need to take action now?

[Mark Spencer]

I thank the hon. Gentleman for his comments and statements—there were not many questions in there. I can tell him that the Government wholly recognise the challenge that inflation brings to the economy. That is why the Chancellor of the Exchequer has set out a number of measures to curb inflation and to manage the economy in a way that he will struggle to understand.

I would also say that huge pressures in the global economy, following Putin’s invasion of Ukraine on the back of a global pandemic, are being felt all around the world. Global energy prices have driven huge spikes, for example in the cost of fertiliser, which the hon. Gentleman mentioned: ammonium nitrate went from circa £250 a tonne to in excess of £1,000 a tonne for a short period. The good news is that global gas prices are easing back and coming back under control into a more affordable price range. That will take time to feed through to some of the cost pressures that are being put on our primary producers, but the Government are continuing to talk—[Interruption.] From a sedentary position, the hon. Gentleman mentions labour. That is why the Government increased the number of seasonal agricultural worker visas to 45,000.

[Jim McMahon]

We need 90,000.