Keir Starmer wants to make your food cheaper.
The PM says that "every minute we focus on anything other than cost of living is a wasted minute”. Food is the most visible part of inflation for most people, and prices have gone up 40% since 2020.
But there's a problem: the Government has limited direct control over food prices.
The main drivers of recent food price inflation are:
🌾a global supply squeeze triggered by Russia’s full-scale invasion of Ukraine
🌡️climate-related shocks
⚡ increases in energy prices, also linked to the war, as well as Britain's dependence on gas.
Meanwhile, supermarket margins are razor-thin, and VAT is already set to zero on groceries, limiting the Government’s options.
So what can we do?
To answer this question,
@BritishProgress has teamed up with
@LivingStandardC to publish new research, drawing on expertise and evidence from
@SYSTEMIQ_Ltd.
We find that there are two main levers the Government can pull to get prices down.
1. 🇪🇺 Closer alignment with the EU: negotiating and agreeing a deal on SPS, plus some customs arrangement, could lower food prices by 3-6%, depending on the level of alignment.
2. 🏗️ Reform planning to increase supermarket competition: current planning constraints benefit incumbents and limit the availability of lower-cost shops.
Previous competition action that enabled the rise of Lidl and Aldi created estimated welfare gains of 3.5% on certain basic products.
The Government could go further and introduce a permitted development right for grocery stores, which would make it easier to open new branches in underserved areas.
Read the full briefing from me,
@YuanfenYang &
@KaneEmerson here:
britishprogress.org/briefing…