Tuesday, June 06, 2023

Tout Suite, if not sooner

 It’s reported that, ‘Rishi Sunak is considering plans for supermarkets to introduce price caps on basic products such as bread and milk   (Emphasis by SOYMB)

There are worries about the continued impact of high food prices (!!!) on households as the cost-of-living crisis drags on.’

The BBC was told by the Health Secretary, Steve Barclay, ‘My understanding is the Government is working constructively with supermarkets as to how we address the very real concerns around food inflation and the cost of living.’

 Don’t worry yourself about it Steve. It’s part and parcel of living in a capitalist society. Bit like what the Mayor of London said, terrorist attacks are part and parcel of living in a big city. You got to take the rough with the smooth. I mean, phew, can you imagine what the alternative would be like? You can? No such thing as food inflation and an unaffordable cost of living?

If you’re having trouble envisaging that Steve, go check out the World  Socialist Movement and really learn about the many concerns that capitalism engenders; and why it needs to be replaced tout suite.

Lest you think that Steve, and his ilk, are uncaring, he/they ‘cares’ about businesses. 

Quote: 'And doing so in a way that is also very mindful to the impact on suppliers.'Because I think we've got to be sighted on the fact that many suppliers - often very small businesses, family-run businesses - are themselves under significant pressure from increased costs. My understanding is this is about having constructive discussions with supermarkets about how we work together - not about any element of compulsion. But it's also being very sighted on the impact on suppliers and making sure we protect suppliers who themselves face considerable pressures.' Unquote.

Capitalists care too. Industry figures claimed the introduction of price caps would make little difference to food inflation.

Food inflation ‘was found to be at 19.1 per cent last month, which was only just down from 19.2 per cent in March and close to the highest rate for more than 45 years.’

According to the Sunday Telegraph,  the Prime Minister is now mulling proposals for retailers to introduce voluntary price caps on some essential staples in order to tackle 'resilient' food inflation. Such a move would copy action taken in France where stores have struck an agreement with ministers to offer a selection of items at the lowest possible price

Andrew Opie, director of food  and sustainability at the British Retail Consortium, said: 'This will not make a jot of difference to prices.

'High food prices are a direct result of the soaring cost of energy, transport, and labour, as well as higher prices paid to food manufacturers and farmers.

'Yet despite this, the fiercely competitive grocery market in the UK has helped to keep British food among the most affordable of all the large European economies. Supermarkets have always run on very slim margins, especially when compared with other parts of the food supply chain, but profits have fallen significantly in the last year. Even so, retailers continue to invest heavily in lower prices for the future, expanding their affordable food ranges, locking the price of many essentials, and raising pay for staff. As commodity prices drop, many of the costs keeping inflation high are now arising from the muddle of new regulation coming from Government. Rather than recreating 1970s-style price controls, the Government should focus on cutting red tape so that resources can be directed to keeping prices as low as possible.' (And profits high).

Julian Jessop of the Institute of Economic Affairs warned that price caps on basic food items might backfire. 'Caps on food prices are at best a pointless gimmick and, at worst, harmful to the very people they are supposed to help,' he said. Despite hype about 'greedflation' driving up food costs, UK supermarkets work on tiny profit margins. While they might be willing to regard some basic foods as 'loss leaders' for positive publicity, they may also compensate for price controls by reducing quantity or quality, and by raising prices for 'uncapped' goods.It is not even certain that the prices of capped goods would end up lower than if there were no cap. Supermarkets may simply price to the cap, and not cut prices further even if falling costs allowed it.'

Labour's shadow work and pensions secretary Jonathan Ashworth said: 'It is extraordinary.' He compared Mr Sunak to 'a sort of latter-day Edward Heath with price controls' in reference to the former Conservative PM's actions in the early 1970s.Fact check: (The Labour Prime Minister Harold Wilson introduced the National Board for Prices and Incomes in 1965.)

A Downing Street source told the Sunday Telegraph that plans for French-style price caps in the UK were were at a 'drawing board' stage. 'The pressures are such that we are working with retailers on anything that can be done at their end to bring down prices for consumers,' they said.

France is currently pursuing an 'anti-inflation quarter' and ministers negotiated a deal with most large food retailers at the beginning of March.Supermarket chain Carrefour was among those to subsequently promise a selection of 200 products would remain at fixed prices for three months until 15 June. (What happens then?)

With Mr Sunak reportedly considering a similar agreement with stores in the UK, a Treasury source said: 'Food inflation is much more resilient and difficult to get rid of than we anticipated.'

On Friday, Chancellor Jeremy Hunt backed further interest rate hikes to calm inflation even if they increase the risk of pushing the UK into recession.

Asked if he was comfortable with the Bank of England acting to bring down inflation even if it could precipitate a recession, Mr Hunt told Sky News: 'Yes, because in the end inflation is a source of instability.

'If we want to have prosperity, to grow the economy, to reduce the risk of recession, we have to support the Bank of England in the difficult decisions that they take.'


The Guardian asked, “UK inflation: which goods and services have risen most in price?” Using information compiled by the Office for National Statistics it’s article charted the increase in food and other commodities compared with a year ago.


An analysis of the ability to provide sufficient food for the world, and the reasons behind mass starvation, provided this relevant conclusion: 

“How is this possible? If agricultural output is already more than sufficient to meet the need of the world’s people why do so many go hungry? It’s because the bulk of food produced today is produced to be sold on a market and so access to it is dependent on purchasing power. If you lack the means to buy food then you are denied it in a market economy. This essentially explains why people go hungry today. They are unable to express enough ‘market demand’ to meet their needs. It’s as simple as that.

If you don’t earn much money you face a serious problem. If the price of food goes up your problem gets even worse. That is why rising food prices translate into more and more people becoming hungry. They might choose to allocate a rising portion of their small budgets to food purchases and a shrinking portion on other things, but there will come a point when this will simply no longer be feasible. Something will have to give. When that happens this often results in an explosion of food riots and violence on the streets that can, and has, toppled governments.”

Robin Cox

Socialist Standard February 2023


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