Food Price Inflation

(Urgent Question): To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on food price inflation.

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.

I call the shadow Secretary of State.

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?

I thank the hon. Gentleman for his comments and statements—there were not many questions in there. I can tell him that the Government wholly recognise the challenge that inflation brings to the economy. That is why the Chancellor of the Exchequer has set out a number of measures to curb inflation and to manage the economy in a way that he will struggle to understand.

I would also say that huge pressures in the global economy, following Putin’s invasion of Ukraine on the back of a global pandemic, are being felt all around the world. Global energy prices have driven huge spikes, for example in the cost of fertiliser, which the hon. Gentleman mentioned: ammonium nitrate went from circa £250 a tonne to in excess of £1,000 a tonne for a short period. The good news is that global gas prices are easing back and coming back under control into a more affordable price range. That will take time to feed through to some of the cost pressures that are being put on our primary producers, but the Government are continuing to talk—[Interruption.] From a sedentary position, the hon. Gentleman mentions labour. That is why the Government increased the number of seasonal agricultural worker visas to 45,000.

We need 90,000.

So the hon. Gentleman says, but there are an extra 10,000 visas available should the industry request it and require it. That request has not come to the Government, because we still have enough people in the supply chain with the 45,000 visas that are available. We continue to work and co-operate with retailers, processors and the food sector on continuing to supply good-quality food to our consumers.

Yesterday’s inflation numbers were a sobering reminder of how terrible a tax inflation is on our economy. It is a tax that harms everyone, but it harms the poorest most. Does the Minister agree that, while Government fiscal policy this year needs to help in terms of halving inflation, the primary responsibility for getting inflation under control has been set in a remit letter given to the independent Bank of England? It is the Bank’s job to make sure that inflation gets back in its box.

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.

I call the SNP spokesperson.

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?

I think being able to ride the challenges and operate on an international basis as a United Kingdom is actually a very good example of our being genuinely better off together. However, we recognise that the spike in food prices is a challenge for consumers, particularly the people on lower incomes whom the hon. Gentleman mentioned. That is why the Chancellor has introduced a £37 billion package to support those people, including pensioners, and that is why they will receive regular £300 payments over the next few years, with continued support from the Government to try to mitigate the impact of these prices.

Let me first draw the House’s attention to my entry in the Register of Members’ Financial Interests.

Before the recent rises in energy and fuel costs, the UK had the most affordable food prices in its history and was considered to have the third most affordable food prices in the world. Does my right hon. Friend agree that the Chancellor made exactly the right decision in continuing to freeze fuel duty, and that that will be extremely welcome both to food producers and to the food processing industry?

My hon. Friend is right to draw attention to the fact that we have benefited from very low food prices for a number of decades, because of the robust systems that we have in place for retailers and producers of high-quality food. He is also right to recognise that fuel costs are a huge driver of inflation if they are allowed to rise dramatically. That is why the Chancellor has maintained that support, and I am glad that he will continue to do so in the future.

Rising food price inflation is terrifying for many families, none more so than those who are already struggling with the cost of living crisis. I speak to numerous families in my constituency who are having to use food banks although in many cases both partners are in full-time employment. That is truly shocking, and such an indictment of Tory Britain in 2023. The Government are clearly not doing enough, so may I ask the Minister what more they can do to help manufacturers and suppliers to bring costs down and make food more affordable once again?

We continue to have regular meetings with the processing and hospitality sectors and with retailers to ensure that there is co-operation throughout the food supply chains. There has be fairness in those supply chains so that risk and reward are shared equally among primary producers, retailers and processors. I think that that co-operation will continue, and the Government are always available to try to co-ordinate these discussions to ensure that we have most effective food supply chains possible.