My Lords, we remain concerned about the impact of current global inflationary pressures on low-income families. This is a government priority and the reason why we have taken decisive action to support those on low incomes. The Chancellor met food manufacturers on Tuesday to discuss food costs and to explore ways to ease pressure on households. He also met the Competition and Markets Authority to discuss its investigations into the fuel and grocery markets.
I am grateful to the Minister for his reply and that the Government are now seriously looking at this, but we know that inflation in basic foods is running at 19%, the highest rate since 1977, and polls show that one in six parents is going without—going hungry—so they can afford to feed their children, while supermarkets are still making record profits. The Minister may have seen reports that families with babies cannot afford baby formula, with the CEO of the British Pregnancy Advisory Service warning:
“We know that families experiencing food poverty resort to unsafe feeding methods, such as … watering down formula”.
What is the take-up of the Healthy Start allowance? Will the Minister urge his department to at least look at increasing its value, which is just £8.50 a week for children from birth to one year old and a staggeringly low £4.25 a week for children between one and four? Are the Government really going to stand by as babies are placed at risk of malnutrition and serious illness due to the cost of living crisis and the soaring cost of infant formula?
There were a number of questions there from the noble Baroness. We know that it is tough for households and businesses across the UK at the moment and are doing whatever we can to support them with the cost of living. The noble Baroness will know that £94 billion is earmarked for giving out. On her question about supporting families who cannot afford the rising cost of infant formula, she will know that in cases of difficulty all local authorities should have an emergency formula provision pathway in place. Families can access this by talking to their health visitor or midwife, who can signpost them to local support. For women who cannot or choose not to breastfeed, Healthy Start provides support towards the cost of first-stage infant formula.
My Lords, I congratulate the Government on organising the Farm to Fork summit but echo the sentiments of the noble Baroness who asked the Question. Does my noble friend share my concern that farmers are not receiving these increasing costs, which they are covering, of energy prices and food production, added to the shortage of staff? Will the Government use every opportunity to investigate the rising profits that the supermarkets are recording?
I take note of my noble friend’s point on the Farm to Fork food summit, which allowed the sector to get together, discuss the future, provide further innovative methods on food supply and discuss the current situation. Supermarkets’ profit margins are actually surprisingly low; I have some figures that I can pass on.
We remain very aware that food banks are being used to a great extent. As I have done before, I pay tribute to those, including charities, who so ably and selflessly run them. With the Family Resources Survey that we picked up on recently, we are very aware of the issues and are determined to ensure that people do not and should not have to go to food banks.
My Lords, in the diocese which I serve, charities in Harlow alone have fed more than 1 million people in the last year, which, frighteningly, represents a slower than the average demand for food banks nationally. I draw the Minister’s attention to the Bounty Club, which works with local businesses and people on the edge of crisis, helping them access a large bag of fresh food for £2.50, saving households on average £20 to £40 a week. Demand in Harlow is such that queues are regularly seen from St Paul’s Church right down the street. What assessment have the Government made of the number of people who are on the cusp of falling into poverty? What strategies are they considering to prevent people requiring the use of their local food bank or even charities such as the Bounty Club?
I take note of the point the right reverend Prelate makes about Harlow. We are alert to those who do fall into poverty. What I can tell her is that in 2021-22, there were 1.7 million fewer people in absolute poverty after housing costs than in 2009-10, but I am very aware of the current situation. All I can say is that we continue to keep an eye on this: we are spending £276 billion through the welfare system in 2023-24, including around £124 billion on people of working age and children, and £152 billion on pensioners, to help with this aspect.
My Lords, the reality is that food is now the new energy; but it is worse, because households spend more of their budgets on food and it is not cheaper in the summer. In fact, it is worse, because the kids do not get free school meals. Food price inflation of 19% is a disaster for poor families. The Minister will know—because he has read the evidence—that those on low incomes, even in work, are already buying own-brand supermarket goods; they are already skipping meals; and they are already going to food banks. There is nowhere else for them to go. Is any thinking going on in the Government as to what they will do right now to help those families this summer?
Of course, the noble Baroness is right. I said at the beginning that much work is going on with regard to interaction with the supermarkets. A number of supermarkets have some urgent initiatives on the go. For example, ASDA has invested £73 million, allowing it to drop and lock prices for over 100 household products. The prices of these products were dropped by 12% on average and will remain this way until the end of the year. Morrisons has similar initiatives: it has cut prices on more than 500 products. It is more than this, and the noble Baroness will know that it is not just the UK. There are other countries, including Germany, where food price inflation remains high, at around 18% or 19%.
My Lords, have the Government made any assessment of the impact on the food industry, and therefore the impact on prices for consumers, of the new labelling requirements, which appear to be quite onerous and are required under the Windsor Framework? The Government are now saying that these will apply not just to goods going to Northern Ireland but right across the United Kingdom. Severe concerns have been raised about the impact on food prices of those requirements.
I do not have any figures to support an answer to give to the noble Lord, but what I can say—to which I alluded earlier—is that, in terms of supermarkets and profits, looking at the money side, there is no reason to believe that supermarket profit margins have significantly increased recently. The overall profits of Tesco and Sainsbury’s fell by 51% and 62% respectively in 2022-23. On the link with Northern Ireland, I will certainly look at my answer, and I may well write to the noble Lord.
My Lords, does the Minister agree that the big problem is with processed food—the more processing, the higher the prices? Fresh food is another matter. The price of wheat this time last year was more than £300 a tonne; it is currently less than £200 a tonne. That is actually less than it was before the Ukraine war started. What effect does the Minister think that will soon start to have on the price of bread and meat?
The truth is that many people on low incomes find it easier, and sometimes cheaper, to buy processed food. That is a fact. Having said that, we would encourage people to go to the local market to buy food. Again, the supermarkets are really stepping up to help those on low incomes.
My Lords, I heard what the Minister said about the Government doing everything they can to help, but I do not think that it is everything. Are they considering extending free school meals? What are they doing about energy bills? An earlier questioner asked about this, but there was no real answer. What are they doing to crack down on the profiteering by supermarkets? The Minister gave an example of one or two supermarkets, but they are not helping people on low incomes.
I take issue with the noble Lord, because they are, and I have made that clear with some examples. On his point about free school meals, under this Government eligibility has been extended several times, and to more groups of children than under any other Government over the past half a century. That includes the introduction of universal infant free school meals and further education free school meals. Approximately 1.9 million pupils are claiming free school meals, and it cost about £1 billion a year. A lot has been done in this area.