Food Prices and Food Poverty

Philip Davies Excerpts

Monday 23rd January 2012 Commons Chamber

[Mary Creagh]

My hon. Friend makes a good point. Such offers increase the volume of sales, but often reduce the margin. That places enormous capital and liquidity costs on small companies in order to fund that as they wait for the money to come in from the supermarket.

[Philip Davies (Shipley) (Con)]

I cannot allow that to stand. As somebody who worked for a supermarket chain for 13 years, may I tell the hon. Lady that suppliers used to fall over themselves to come to retailers and ask to do buy one, get one free offers or three for the price of two offers, because it was a good marketing tool for them? When I worked for Asda, we used to ask them whether we could have every-day low prices instead of all those offers, but it was the suppliers who were pushing buy one, get one free offers. The idea that supermarkets are forcing them on them is just guff.

[Mary Creagh]

That is interesting. I am sure the hon. Gentleman will have a range of suppliers who will appear in the press tomorrow to say that the groceries code adjudicator is not required. No doubt they will make their thoughts very clear through the Food and Drink Federation, which represents the sector. However, I will not hold my breath for that. I like shopping in Asda, but I am not sure that it represents the sunlit uplands that the hon. Gentleman remembers from his happy times working there.

We want the Government to act swiftly on the grocery ombudsman. That will lead to less pressure on suppliers and an end to unfair competition, and greater price transparency in the supermarket sector. We want supermarkets to commit to clearer price labelling, particularly on those buy one, get one free promotions. If they do not do so voluntarily, Government should act. We call on supermarkets to commit to sending their in-date food waste to charities such as FareShare, which will ensure that it goes to a good home. We want supermarkets to publish the amount of food they waste, and if they do not do so, the Government should take action in the next waste review. We want supermarkets to commit to recycling more of that food to hungry children and less to landfill.

We call on DEFRA Ministers to work with stakeholders to define food poverty, identify the extent and scale of the problem and commit to tackling it. We have heard about the extent of the problem today and the obscenity of food being wasted while people are going hungry in our towns and cities, but anecdotes are not evidence. We ignore the perfect storm of rising food prices, falling incomes and food poverty at our peril.

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[Mrs Spelman]

I am challenging the hon. Member for Wakefield to consider the fact that during her party’s 13 years in power, which saw steep rises in food prices, it introduced neither a groceries code adjudicator nor the other measures called for in the motion. Despite claiming today that the adjudicator would be some sort of panacea, the hon. Lady seems to feel that doing nothing about this for 13 years is a credible basis on which to criticise us for not having completed the process in just over 18 months.

[Philip Davies]

I must say that this is bizarre. My right hon. Friend says she is concerned about rising food prices, but she is agitating to bring in a groceries code adjudicator that, if it will have any influence at all, will only be able to put prices up further. The two things are completely contradictory.

[Mrs Spelman]

If we thought that the groceries code adjudicator would put prices up, there would not be the current cross-party support across the House for creating one.

The important point is that we need a degree of humility and candour about the Labour party’s record. As has been noted, Labour has shown extraordinary candour in the wording of its motion. We must be clear that the hon. Member for Wakefield is calling on the coalition Government to introduce the adjudicator early in the next Parliament. I am not sure whether she knows the outcome of the next election, but the motion clearly indicates that she has written off Labour’s prospects of forming the next Government—she is certainly not alone in that. It is always good to start a debate with an issue on which we can make common cause, but the good news for her is that we will not wait until the next Parliament to introduce the adjudicator.

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[Robert Flello]

My hon. Friend is quite right. However, let us not lose track of the serious point.

[Philip Davies]

Will the hon. Gentleman make it clear to hard-pressed families in his constituency whether he is in favour of supermarkets and retailers offering buy one get one free offers, or against? I am sure they would be very interested to know.

[Robert Flello]

I am delighted that the hon. Gentleman asks that question. I would like the goods on the shelves to be at a fair price so that families can afford to buy one of something and do not have to go for a two-for-one offer to get the best value. I know that he is perhaps still an unpaid spokesperson for a supermarket.

There is a problem with the desire for perfect food, too. Our farmers are having to waste a lot of food because it does not meet some of the supermarkets’ requirements for perfect food.

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[Miss Anne McIntosh (Thirsk and Malton) (Con)]

I congratulate the hon. Member for Wakefield (Mary Creagh) on calling the debate. In welcoming it, I draw attention to my declaration in the Register of Members’ Financial Interests. However, there are many other issues that the hon. Lady could have mentioned, which exercise those who live in rural communities. I recognise that Wakefield may not be quite as rural as Thirsk, Malton and Filey, but if we consider poverty among the farming community over the past 10 years, particularly in small upland farms, it is fair to say that farmers are not in a position to employ many outside their own family. Normally the farmer, his wife and his family work on the farm, and that has led to diversification when possible. In some of the most successful examples, such as Shepherds Purse cheeses and Get Ahead Hats, the wife has diversified or gone out to work separately.

The hon. Member for Wakefield also failed to tackle the increasingly important issue of farm-gate prices, as opposed to rising supermarket prices. I would like to draw attention to that. In my constituency, I can point to pockets of rural poverty in the Hambleton district. In the Ryedale district there is a poverty gap, for those on low incomes, between their low wages and the particularly high cost of housing.

DEFRA’s farm business income report showed that the cost of fertiliser and animal feed rose by nearly 30% each in 2010-11, the last year for which figures are available. That means that the livestock and horticulture sectors have suffered falls year on year. I draw the attention of the hon. Member for Wakefield to the fact that livestock farm income fell by 29% in lowland areas and by 19% in upland areas, with horticulture income down 27%.

The hon. Lady did not consider exchange rates, which my right hon. Friend the Secretary of State mentioned. What if the unthinkable were to happen and the euro failed—or what if even one member country fell out of the euro? The question being asked coming up to spring in auction marts, particularly in the north of England, where most of the lambs are exported, especially to France, is: how and in what currency will farmers be paid? They are starting to wonder whether they will be paid at all. We had the opportunity to cover some of those issues in today’s debate, and I am disappointed that we did not.

I welcome the debate, but, as my right hon. Friend the Secretary of State explained, we are looking at the high cost of fuel as well as the increased costs of feedstuffs and fertiliser. As the Chancellor of the Exchequer has said on so many occasions, oil prices are set globally. The price of cereals and many farm commodities are set internationally.

I want to focus on the role of supermarkets, and particularly the part of the motion that deals with the groceries code adjudicator. I draw the House’s attention to a successful one-off evidence session that the Environment, Food and Rural Affairs Committee held. The hon. Member for Wakefield has included kind words about the Committee in her motion. At the evidence session I was very moved by a category of people to whom, again, the hon. Lady did not refer—individual fruit and vegetable growers and horticultural growers, who have the loosest possible arrangement with supermarkets and virtually no protection. We were shocked to realise that their contracts could be terminated at a moment’s notice. They need protection and the ability to make a complaint anonymously. As we said in the letter that we submitted to the Chairman of the Business, Innovation and Skills Committee:

“For many years there has been a ‘climate of fear’ in the groceries supply chain. We therefore endorse the provision in the draft Bill that will allow the Adjudicator to receive anonymous complaints from direct or indirect suppliers about retailers breaking the Groceries supply Code.”

I hope some good can come out of today’s debate and urge my right hon. Friend the Secretary of State to use her good offices to put pressure on the Secretary of State for Business, Innovation and Skills; that is the responsible Department.

I commend all the Committee’s conclusions without hesitation, but I shall draw attention specifically to two of them.

[Philip Davies]

My hon. Friend will know that the vast majority of suppliers to supermarkets are, by definition, huge organisations—multinational companies such as Mars, Coca-Cola, and Proctor and Gamble. Does she think that they need the protection of a grocery ombudsman, or does she agree that they are more than big enough to look after themselves?

[Miss McIntosh]

I am so fond of my hon. Friend that I have great difficulty in saying that I must draw his attention to the remarks I have just made. His big organisation—Asda—is revered in north Yorkshire because it stemmed from Associated Dairies, which not only set the price but provided a market for local milk suppliers. Individual growers need protection, because they are unable to speak for themselves. We all have big constituencies and may not always be aware of such individuals. I hesitate to say whether big companies are “good guys” or “bad guys”, but Asda and Morrisons source a lot of their food locally—almost 80% or 90%. We need to protect the small individual growers.

The Environment, Food and Rural Affairs Committee believes that two of its conclusions could have an impact if the Secretary of State for Environment, Food and Rural Affairs can persuade the Secretary of State for Business, Innovation and Skills to amend the draft Groceries Code Adjudicator Bill. First, the ability of suppliers to make anonymous complaints is fundamental to the success of the groceries code adjudicator. Secondly, the adjudicator should have the power to launch investigations. We are all agreed that he should have the power to fine, but he should also have the power to launch investigations.

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[Nia Griffith (Llanelli) (Lab)]

I pay tribute to the excellent work done by my hon. Friend the Member for Ynys Môn (Albert Owen) through his private Member’s Bill, the Grocery Market Ombudsman Bill, which, as many Members will know, had a long history spanning several years. He said—this is the most important thing to remember about the Bill—that it was about fairness to all those involved, whether they were farmers, small producers, local suppliers, suppliers from developing countries, small shops, convenience stores, supermarkets or, most importantly, consumers.

The Bill led to the proposal for a supermarket ombudsman or groceries adjudicator being in all three parties’ manifestos for the 2010 election, but what has happened since then? The hon. Member for South Staffordshire (Gavin Williamson) secured an Adjournment debate on the groceries code adjudicator last April, and in May we had the Department for Business, Innovation and Skills document, “The Government’s policy for a Groceries Code Adjudicator”, but it is now January 2012 and we do not seem to be any further on.

I should like to ask the Secretary of State why we are waiting so long for the Bill and when we are going to see it. Is it going to contain the proper sanctions that we all want to see—sanctions that will actually make a difference and make people change their behaviour? Will the adjudicator be able to carry out proactive investigations? One thing is certain: if, as the hon. Member for South Thanet (Laura Sandys) has explained, we need to increase food production, farmers are not going to be able to do that if they are being squeezed on prices. Many Members have cited the dairy industry as an obvious example. If the price of milk is squeezed, people inevitably go out of business and we produce less, which means we end up importing even such things as milk, which one would think we could produce very easily in our climate.

[Philip Davies]

Here we are being offered again this painless panacea in which everyone benefits from an ombudsman. Will the hon. Lady explain how getting the supermarket to pay more to the supplier and the farmer, fining it more and getting it to pay for the ombudsman will result in reduced costs for the customer? I am absolutely fascinated to hear how that will work.

[Nia Griffith]

This is about fairness. It is about paying a fair price to farmers for what they produce, having a fair price for consumers, and stopping sharp practices. It is about protecting the good businesses—the good guys if you like—and creating a level playing field, which is extremely important.

Let me address what happens to people when they go into supermarkets, particularly when they buy fruit and vegetables. We should not forget that there has been a dramatic drop of 30% in fruit and vegetable purchasing by the poorest families, so that the poorest children now get only 2.7 of the five portions of fruit and veg they should have each day. Is it small wonder that when people go into supermarkets they are quite worried about what will end up on their bill at the till, given that they are absolutely dazed by the displays of fruit and veg and the ways of pricing them? Sometimes they are priced by the item, sometimes by the packet—in fours, eights or tens—and sometimes by weight. For example, there are many varieties of tomato, from cherry tomatoes to beef tomatoes, and there is a range of different pricing mechanisms, which is extremely confusing. There should be a very simple formula that allows us all to compare prices easily, because it is very difficult with loose items such as fruit and veg, which can be packed in so many different ways, to work out exactly what one is being charged. Last September there was a bumper crop because of that fabulous spring we had last April, but did we see prices drop? No. Could we have told if they had dropped? No, because unlike at the petrol pump where we can all see the sign displayed very clearly and can tell when prices go up, one cannot see when prices for fruit and veg go up—it is easy to disguise and to pull a fast one on the consumer. Those issues need to be addressed.

As my hon. Friend the Member for Bolton West (Julie Hilling) has explained, the number of people needing help from food banks is increasing and it is set to increase further. Why? Because some of this Government’s taxation policies are hitting the poorest hardest and squeezing their income. For example, some of the changes being introduced mean that those on low wages who are trying to do the right thing and go out to work are going to find that their tax credits will be cut. They would like to top up with more work hours, but those hours simply are not available. Sometimes that is because supermarkets prefer to have people on low hours; it gives them more flexibility for the Saturday and Sunday shifts that they want worked.

What about the cuts to housing benefit? They are going to leave many families who currently receive the amount they need to pay their rent having to use what should be food money to pay the rent. That is why we will see dramatic drops in the amount that people have to pay for their food. There will also be more and more families relying on food banks. What about the cuts in winter fuel allowance? They will leave some of our pensioners with less money to spend on food.