Food Prices and Food Poverty

Kerry McCarthy Excerpts

Monday 23rd January 2012 Commons Chamber

[Mary Creagh]

I agree. Sure Start has been an amazing tool in the fight for good food in families, and for cooking lessons. The 20% cut imposed by the Government centrally can only make that more challenging for those dedicated workers.

[Kerry McCarthy (Bristol East) (Lab)]

Does my hon. Friend share my concern that the Secretary of State for Education has decreed that free schools and academies do not have to meet the same nutritional standards in school meals as state schools?

[Mary Creagh]

Yes, it is slightly bizarre that that should be the case. I do not understand why, having battled so hard to secure minimum standards across the sector, the Secretary of State should think it acceptable to water them down, unless it is about saving money in pursuit of an ideological objective, but that could surely never be the Government’s intention.

I have mentioned “Richard Corrigan on Hunger” and the hospitalisation of children. People also talk in that programme about lunch boxes containing last night’s cold chips and ketchup. In government, we set up the School Food Trust, whose latest research shows that the average local authority-catered school dinner has gone up by 5p in the past year to £1.88 in primary schools, and by 4p to £1.98 in secondary schools. Councils are forced to charge more as their Government funding has been cut. We have heard today about councils that are doing their best to prioritise children’s nutrition. Those price rises could force parents to take their children out of school-meal provision and make do with a lunch box. If someone has three children who do not qualify for free school meals, £6 a day or £30 a week is an awful lot of money to find.

Food will be a defining issue for this century. The price spike in food commodities in 2008 showed that the era of cheap food may not be with us much longer. Increases in commodity prices—oil, fertiliser and pesticides—all contributed to year-on-year food price inflation of 6% last September: the second-highest increase in the EU, apart from Hungary. That 6% added £233 to the food bill of a family of two adults and two children. Food inflation, currently at 4%, remains higher than most pay rises that people will receive this year. As prices rise, people are eating less beef, lamb and fish, and more bacon. People are shopping around and trading down, and there is less supermarket loyalty. Figures from DEFRA reveal a 30% fall in the consumption of fresh fruit and veg by the poorest fifth of families since 2006. Those families are eating just 2.7 of their five-a-day fruit and veg.

We need a better understanding of what is driving up food prices, and how costs and risk are transferred across the supply chain. However, shopping is confusing and labels do not always show the true costs. Supermarkets are not required legally to show the unit cost on special offers, so they give the price pre-discount, which makes it impossible to compare prices on the shelf; or they give the price per unit of fruit, rather than by 100 grams, making comparisons impossible. We want supermarkets to be more transparent in their labelling to ensure that shoppers get the best deal. We want them to help people to eat healthily. Our traffic light system was rejected by significant players in the food industry, who have turned their back on what consumers want and need to make healthy choices.

We want a fair and competitive supply chain for growers, processors and retailers. The Competition Commission in 2008 found that there was an adverse effect on competition from unfair supply chain practices. It recommended that supermarkets with a turnover of more than £1 billion a year should be prevented from imposing retrospective discounts and from changing terms and conditions for suppliers. That leads to an unfair spread of risk and cost down the grocery supply chain, and to short-termism in relationships. [Interruption.] I thought I heard a phantom sedentary intervention, but that is not the case. We wanted a voluntary approach, but the supermarkets were unable to agree a way forward. That is why Labour in government secured cross-party agreement for a groceries code ombudsman to ensure a fair deal for farmers and producers. This Government’s delays and procrastination mean that the adjudicator will probably not be up and running until 2014-15.

--- Later in debate ---

[Kerry McCarthy (Bristol East) (Lab)]

As we have heard, people in the UK are facing the biggest squeeze in living standards since the war. They are being hit on all sides. They are losing their jobs or their overtime or having their pay frozen. If they are self-employed, they are struggling to earn the sort of money that they used to earn. They are being hit by cuts to public services, rising fuel bills, rising rents, cuts to housing benefits, cuts to tax credits, and as we have heard today, they are being hit by rising food bills too. All those things add up and have a devastating impact on household finances.

Food prices in the UK have been rising at well over twice the rate of the incomes of the poorest. Over the past five years, food prices have gone up by 32%, rising at well over twice the rate of the national minimum wage and twice the rate of jobseeker’s allowance. Around one in every 16 people have been forced to skip meals so that the rest of their family can eat. In Bristol that represents 26,500 people in the city having to go hungry because of financial hardship. Eight hundred people in Bristol have used a food bank in the past year. Oxfam South West has reported an increase in demand on its food banks, with some reporting a 100% increase on the previous year’s total of applications for help. As we have heard, the Trussell Trust estimates that the number of people using food banks could increase from 100,000 this year to up to 500,000 by the end of this Parliament.

I congratulate the charities and Churches that run the food banks on the work they do. During the half-term recess I will be visiting the food bank in Bristol run by FareShare, which is an excellent organisation. Those charities make an immeasurable difference to people’s lives, but as Kate Wareing, Oxfam’s UK poverty programme director, has said,

“Everybody in the UK should have enough money to feed themselves and their families, whether they are in or out of work. It’s an outrage that increasing numbers of people in our country are having to visit food banks to feed themselves or put a hot meal on the table for their children.”

So although I welcome the work of those running food banks, I—unlike the Secretary of State—do not welcome the need for their existence.

Families are not only turning to food banks. The Child Poverty Action Group has found that for a quarter of the children in the UK, school dinners are their only source of hot food. In Bristol the number of children eligible for school meals has been rising. Fortunately, the local schools forum agreed to maintain funding after this Government discontinued the ring-fenced school lunch grant, but schools too will be affected by rising prices. The value of breakfast clubs is often overlooked, despite the fact that 32% of children regularly miss breakfast. The simple truth is that too many children arrive at school each morning having not eaten a proper meal since lunchtime the day before. Research by London Economics found that breakfast clubs led to a statistically significant increase in attainment and improvements in punctuality that clearly outweigh the costs. A survey by Magic Breakfast, a charity that provides breakfasts at 22p per child at 200 primary schools, including some in Bristol, found that 88% of schools see improved attendance.

In the limited time I have left, I want to talk about the problem of food waste. Many people would regard it as immoral that good edible food is thrown away when people are going to bed hungry. On a global scale, all the world’s 1 billion hungry people could be lifted out of malnourishment on less than a quarter of the food wasted in the US, the UK and Europe. Charities such as FareShare and FoodCycle are taking concerted action to tackle the problem, and doing so in a way that also encourages healthy eating, community involvement and volunteer engagement. I am proud to be a patron of FoodCycle.

Much of the problem lies in the supply chain—farming, feeding livestock, transportation, supermarket supply, restaurant policy and expenditure, and a demand for out-of-season food free from visual imperfections, as we heard from the hon. Member for South Thanet (Laura Sandys). I congratulate her on her Ugly Food campaign.

In its most recent report on the grocery market in 2008, the Competition Commission concluded that supermarkets are guilty of passing unnecessary risks and excessive costs on to their suppliers—for example, through forecasting errors by supermarkets. They might tell a manufacturer a week in advance that they will probably want 100,000 sandwiches, but on the morning the sandwiches are to be delivered, they substantially reduce their order, leaving the supplier with a pallet-load of sandwiches that they cannot sell. Worse still, many products carry the supermarket’s own brand name and supermarkets will often forbid the manufacturers to sell the products on, insisting that they must be sold to them exclusively. There is also concern that if they give the products to charity, that will damage the brand.

Particularly shamefully, supermarkets often agree a price for a product with their supplier, but when sales are less than predicted and products need to be put on price reduction, the supermarket will turn around and require the supplier to share the burden of the reduced revenue. Even worse, there are the notorious take-back agreements, whereby supermarkets return to the manufacturer produce that they have failed to sell.

Although the work of food redistribution charities is invaluable, their very existence implies an acceptance of the level of social inequality that creates the coexistence of food poverty and food waste. With more than one in five workers earning less than a living wage, low pay is so pervasive that tax credits and food parcels are required to give hard-working families the support they need simply to put food on the table. That is why I strongly support calls for the draft Groceries Code Adjudicator Bill to be brought forward in this year’s Queen’s Speech.

I will also bring forward a ten-minute rule Bill in March calling for action to enforce the principles of the food waste pyramid, which deals first with the reduction of food waste, then with the distribution of surplus food to redistribution charities, and then with sale or donation for feeding livestock, rather than food waste being sent for anaerobic digestion, or—even worse—landfill. I will be happy to talk with other Members who are interested in the Bill, and I hope that they will join me in supporting it.