Household Budgets: Food Prices

Environment, Food and Rural Affairs – in the House of Commons on 28th April 2022.

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Photo of George Eustice George Eustice The Secretary of State for Environment, Food and Rural Affairs

Since we last gathered for DEFRA oral questions, our noble Friend Lord Plumb has, sadly, passed away. He was a titan of the agriculture industry, and National Farmers Union president throughout most of the 1970s, during a period of great change. He then went on to be President of the European Parliament. I know that the thoughts of all those in the House will be with his family.

Agricultural commodity prices fluctuate in any given year based on factors including energy costs and exchange rates. High energy costs exacerbated by events in Ukraine mean that there is going to be pressure on food prices as a result of increased input costs. The Government monitor household spending on food. Between 2008 and 2016, the proportion of household income spent on food by the poorest 20% of households was about 16%. It then dipped to under 15%, but we can expect that proportion to rise.

Photo of Jessica Morden Jessica Morden Chair, Statutory Instruments (Joint Committee), Chair, Statutory Instruments (Select Committee), Chair, Statutory Instruments (Joint Committee), Chair, Statutory Instruments (Select Committee), Shadow Vice Chamberlain of HM Household (Whip), Shadow Deputy Leader of the House of Commons

Family-run farms such as Castle farm in my constituency are really being hit hard by the cost of feed, fuel and fertiliser, which in turn impacts on the cost of things such as eggs, as reported by BBC Wales today, and just adds to the soaring food prices that are hitting families so hard. Why are the Government not doing more, especially when the supermarkets are now cutting prices?

Photo of George Eustice George Eustice The Secretary of State for Environment, Food and Rural Affairs

The Government are taking action. We have made available an additional £500 million to help households with increased pressure on household budgets. We are also taking measures, for instance, to remove tariffs on maize to try to reduce the costs of animal feeds. The hon. Member is right that the supermarkets will absorb some of these costs, but probably not all.

Photo of Chris Loder Chris Loder Conservative, West Dorset

What is my right hon. Friend doing to give the Groceries Code Adjudicator some more teeth to make sure that supermarkets do not inappropriately take advantage of the difficulties that we see with food prices? As he will well know, a lot of farmers face great pressure from supermarkets, and some would argue that they actually control the prices that farmers get when that is not really how it should be.

Photo of George Eustice George Eustice The Secretary of State for Environment, Food and Rural Affairs

The supermarket adjudicator has, in recent years, made good progress in bringing transparency to the way relationships work between suppliers and the supermarkets. In addition, through the Agriculture Act 2020, we have introduced new powers so that in future we will be able to regulate and improve the transparency and fairness of contracts between farmers and processors.

Photo of Jim McMahon Jim McMahon Shadow Secretary of State for Environment, Food and Rural Affairs

Britain is besieged by a cost of living crisis. Tax hikes and rocketing bills are making life harder for working people. We know that 4.7 million adults and 2.5 million children live in food poverty, 2.1 million food parcels were issued last year, and 1 million people will not eat at all today. Looking back on his nine years in the Department, what would the Secretary of State have done differently to improve rather than weaken the food security here in the UK?

Photo of George Eustice George Eustice The Secretary of State for Environment, Food and Rural Affairs

Our food security, based on the amount of production we have in this country as a proportion of our consumption, has remained remarkably stable, at around 75%, for the past 22 years. Since we have left the European Union, we have had the ability to increase investment in farms and make available more grants for that, which we have done, and we have also introduced measures to improve transparency and fairness in the supply chain.

Photo of Jim McMahon Jim McMahon Shadow Secretary of State for Environment, Food and Rural Affairs

The Secretary of State knows that the cost of food will get much higher as farmers and producers grapple with increased costs and Government-inflicted labour shortages. As the Minister responsible for food security, will he urgently convene a cross-Government summit with the food industry, devolved and local government and charities to finally get ahead of the crisis—or are the Government once again just out for themselves, out of touch, and completely out of ideas?

Photo of George Eustice George Eustice The Secretary of State for Environment, Food and Rural Affairs

I have already had many such meetings with the food industry and the agricultural industry about the current situation and the pressures on those input costs. The next meeting of the UK Agricultural Partnership in Scotland will focus specifically on the issue of food security.

Photo of Deidre Brock Deidre Brock Shadow SNP Spokesperson (Wales), Shadow SNP Spokesperson (Environment, Food and Rural Affairs)

The shadow Secretary of State will be pleased to hear that Cabinet Secretary Mairi Gougeon has called for a four-nation summit, and I believe the UK Government have agreed to that, so I am pleased that that will see some progress.

National Farmers Union of Scotland president Martin Kennedy has said that the UK is on the verge of food security concerns not seen since world war two due to covid, Brexit and the war in Ukraine, with feed, food and fertiliser costs and labour shortages drastically affecting the farming and food production sectors. London School of Economics analysis shows that Brexit alone raised food prices by 6% in the past year or so. The Office for Budget Responsibility forecasts Brexit losses to be more than £1,250 per person, and 178 times bigger than trade deal gains, which, combined, are worth less than 50p per person. What support packages is the Secretary of State considering for the farming and food production sectors to ensure that their extra costs will not also be passed on to consumers?

Photo of George Eustice George Eustice The Secretary of State for Environment, Food and Rural Affairs

The hon. Lady is right: I have spoken to Mairi Gougeon of the Scottish Government, and we are going to have the next meeting of the UK Agricultural Partnership at the James Hutton Institute, which approached me to host that event, and we look forward to it. On her wider points, the truth is that after the 2016 referendum household spending on food actually went down, but food prices have always been governed principally by the price of energy and by exchange rates.