Food Price Inflation

Lindsay Hoyle Excerpts

Thursday 23rd March 2023 Commons Chamber

[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?

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[Mark Spencer]

I pay tribute to my hon. Friend for her work chairing the Treasury Committee and holding the Treasury to account. She will be aware that the Prime Minister’s priority is to get inflation back under control and get it down. We will continue to work across Government to make sure that that happens, and we do recognise the challenge that this brings to consumers and to our constituents.

[Mr Speaker]

I call the SNP spokesperson.

[David Linden (Glasgow East) (SNP)]

I congratulate the shadow Secretary of State on securing this urgent question. The cost of living crisis remains the SNP’s top priority, alongside tackling energy bills. This Government talk about halving inflation, but just yesterday it went up again to 10.4%, and we know that at lunchtime the Bank of England will hike interest rates up to reflect that.

All this, I am afraid, puts pressure on household budgets, which are under enormous strain already. Stats from the Office for National Statistics show that food price inflation runs at 18.2%. The poorest tenth of households experience an even higher rate of inflation, according to the Resolution Foundation. A number of adults are buying less food at the supermarket; worryingly, we are hearing of mothers diluting formula with water just to try and get by. Does the Minister agree that we therefore need to look at the essentials guarantee proposed by the likes of the Joseph Rowntree Foundation and the Trussell Trust: £120 a week for single people and £200 for couples? If the Government will not do that, will they just get out of the way and let an independent Scotland get involved so that we can actually tackle food poverty and make sure that people can live in dignity?

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[Mark Spencer]

We should be clear that I am the Minister with responsibility for food, which is why I am here to answer this urgent question. We take this challenge very seriously, and we continue to work with other Departments to try to help households cope with food price increases. As I said earlier, the good news is that we are seeing signs that this is the peak of food price inflation. There are signs that global gas prices, fertiliser prices and import costs are starting to reduce.

[Mr Speaker]

I call Kim Johnson.

[Kim Johnson (Liverpool, Riverside) (Lab)]

I have forgotten my question!

[Mr Speaker]

In that case, I call Barry Sheerman, who always has a question.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I know the Minister to be an honest chap, so will he stop making excuses, whether it is Putin or snow, and wake up to the fact that the food bank network is crumbling? The network cannot cope with demand, and it cannot get the supply. Its volunteers across the country are stressed out by the pressure. When will he do something? Perhaps all the money raised by the plastic bag charge could flow not into the supermarkets’ back pockets but into the food banks.

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[Mark Spencer]

There is a fundamental difference between today and the 1970s: employment is at a very high level and lots of jobs are available to people. But that does not mitigate the challenge that some constituents are finding themselves in. That is why the Chancellor of the Exchequer has introduced this huge package of support to try to help people with that cost of living challenge they face.

[Mr Speaker]

I call Kim Johnson.

--- Later in debate ---

[Mark Spencer]

There have been many conversations, both across Government and with producers, manufacturers and retailers, on reducing the amount of plastic packaging that we release into the environment, and on making packaging more reusable and recyclable, and less costly to the consumer.

[Mr Speaker]

As it is his birthday on Saturday, and given the worries about the price of birthday cakes, we had better hear from Jim Shannon.

[Jim Shannon (Strangford) (DUP)]

I am still a young person at heart. I thank the Minister very much for his responses. He understands the issues well. He and the Government are doing their best. I hail from a constituency that grows the best potatoes: Comber potatoes. Everyone knows that they are the best in the UK, and indeed the world. My constituency ships ready-to-eat mash and other veg throughout the United Kingdom. The potential is there for us to be self-sustaining. Will the Minister outline how he intends to support the farming industry, so that it can make more British produce to sell in the internal market, which will lower the price of staple foods? That, in turn, will lower inflation for all.