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Food Price Inflation

Volume 828: debated on Thursday 23 March 2023

Commons Urgent Question

My Lords, I will now repeat in the form of a Statement an Answer to an Urgent Question in the other place:

“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 in some cases to 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 of 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 a 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 of affordable 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.”

My Lords, I am grateful to the Minister for reading out the response from Farming Minister Mark Spencer, even if it does not fully reflect the struggles being faced by households across the country. Earlier this afternoon, the Bank of England raised interest rates for an 11th consecutive time, which of course will increase mortgage, credit and other costs at a time when many people are already scaling back on their food shops.

We understand that the Secretary of State cannot always be available to take a UQ, but her absence this morning was concerning. She is the department’s representative at the Cabinet table, and I think many people across the country would expect her to take an active interest in issues around food costs and security. Can the Minister therefore outline her involvement in this issue? What meetings has she had recently with producers and retailers, or have those meetings also been delegated to others?

I can assure the noble Baroness that the Secretary of State is deeply involved in this issue. The Food Minister, Mark Spencer, took this Urgent Question, which is right, as he is the Minister responsible for food supply, food security and other related issues. The noble Baroness is absolutely right that this matter affects a number of different departments right across government, and the Prime Minister and the Chancellor of the Exchequer have also been deeply involved in this. I do not know precisely what meetings the Secretary of State has had on this issue, but I will be happy to write to the noble Baroness with details of discussions she has had. I can certainly say from my own experience that the Secretary of State is very involved in this issue.

My Lords, I thank the noble Lord for repeating the Statement. Some £37 billion has gone to support households with the cost of living but there is no detail as to eligibility. Can the Minister say how this money is being distributed? I welcome the Government’s intention to permanently extend free school meals eligibility to children from all families with no recourse to public funds. Can the Minister say whether this means that free school meals will be available to all those who are eligible during the school holidays? As the Statement says, the price of milk, cheese and eggs has risen by 30.8%. Can the Minister say whether any of the £37 billion support is reaching the farmers who produce our milk, cheese and eggs?

I thank the noble Baroness for her question. On free school meals, the Government fully support the provision of nutritious food in schools to enable pupils to be well nourished, develop healthy eating habits and concentrate and learn in school. There is so much evidence from a number of different bodies about the importance of the right nutrition to assist with learning and ensure that the school day is as beneficial as possible. We have full confidence that schools and catering suppliers will continue to deliver a quality service. As the noble Baroness will know, under this Government, eligibility for free school meals has been extended several times, and to more groups of children than under any other Government over the past 50 years. This has included the introduction of universal infant free school meals and further education free school meals, as well as the permanent extension of eligibility to children from all families with no recourse to public funds—for example, people with temporary immigration status—which came into effect in April 2022.

We are doing much more to assist households, but she rightly asked where this money is going. It is going directly to those households that need it. Farmers and producers, who are at that end of the supply chain, are being assisted, supported and incentivised in a number of ways. She will have seen measures brought in in the Budget to help farmers through fiscal changes. We are securing and ring-fencing the £2.4 billion a year that we spend supporting farmers, but encouraging them to move towards a system of sustainable farming so that they are protecting our natural capital. This secures the food supply in the long term; it is not just dealing with a temporary problem that has emanated from the alarming effect of the war in Ukraine. Of course, we need to take further long-term measures to make sure that we are incentivising farmers to continue to produce food close to those who eat it.

My Lords, I thank the Government for their generous support, but what further measures beyond the Genetic Technology (Precision Breeding) Bill are they planning to help science enable farmers to produce more in this country while at the same time improving the environment?

I thank my noble friend for that question. Technology is our friend in tackling the needs of future generations. As part of seeing how the Genetic Technology (Precision Breeding) Bill would work, I went to a laboratory in Oxford and spoke to real experts in this field. I came away extremely optimistic that, through the changes we are bringing in through such Bills, but also the incredible work happening across institutions in the United Kingdom and abroad, our ability to feed ourselves in future is perfectly feasible. It needs will from government, investment and continued support for the scientific community, which is driving this change. Also, that scientific evidence needs to feed through to the farmers, producers and processors so that they can continue to produce food affordably and in a sustainable way. I can absolutely assure my noble friend that science is at the heart of government policy on this.

My Lords, it is good to hear the Minister talking so positively about school meals, so why are the Government still rejecting the calls from Henry Dimbleby and public health leaders to extend free school meals to all children in families on universal credit? When food prices are going up so much, we will have more hungry children than we have already.

As the noble Baroness will know, we have extended free school meals to the largest group of children for decades, and we will continue to look at any other measures we can take. I draw her attention to the work that the Department of Health and Social Care has done for infants. It has increased Healthy Start food vouchers from £3.10 to £4.25, which is a significant increase, helping low-income families to buy basic food such as milk, fruit and vitamins, ensuring that families are not choosing between costs and healthy choices. There are many other areas where the Government can assist, such as advice on diet and nutrition that enables families to make the right choices for them.

My Lords, the Statement expresses great faith in the food supply chain, which I can see only as an expression of extreme complacency. It also reflects that domestic suppliers—that is, supermarkets—have kept prices low. Has that not been the source of recent supply problems? The Government have been suggesting that we should be eating more turnips. Of course, the majority of turnips that we consume are produced outside the UK. Does the Minister agree that we cannot keep relying on the soil, water and labour of others to feed ourselves, particularly for the fruit and vegetables which we need far more of?

Our food supply chain was tested as never before through the pandemic. The noble Baroness looks at me as if to say that that is not the case—it is the case. It was tested as never before and found to be secure. With one or two short-term exceptions, it kept us in this country able to have the food that we needed available to us. On costs of lines in supermarkets, Defra works with retailers on a weekly basis to see what direction they are taking to tackle the crisis in household incomes and to make sure that lower-priced products are available, and that those lines are continuing. We do not have a command and control economy that directs our retailers in what they can produce, but they have risen to the challenge, providing a great many lower-priced lines which will continue to be available for families such as this. I hope that will continue.

Sitting suspended.