Treasury urges supermarkets to cap food prices to alleviate cost of living crisis
The Treasury is reportedly calling on supermarkets to limit food price increases as officials fear the Iran war will increase bills for households already struggling with a cost of living crisis.
It was stated that the policy, which will be voluntary, will be applied to common products such as bread, eggs and milk. Finance Times.
In response, the government is expected to relax packaging regulations in supermarkets and potentially delay rule changes on healthy foods.
Millions of UK households are already being forced to skip meals and reduce family visits as the cost of living crisis continues to bite.
A survey last month showed that two-thirds (67 per cent) of households had changed their shopping or eating habits to reduce their spending on food in the past month.
But supermarket bosses branded the government’s idea “desperate” and “crazy” and compared it to failed policies of the 1970s.
One executive said: “They are so desperate to do something that will address the cost of living, but this doesn’t feel like the right way to do it.”
They said the plan risked increasing prices for shoppers overall, with other costs such as taxes, fuel and energy rising.
Sources told Finance Times He said the Treasury had asked supermarkets to voluntarily cap the prices of daily necessities such as eggs, bread and milk.
The British Retail Consortium, which represents supermarkets, said the policy would “force retailers to sell goods at a loss” and described the policy as “1970s-style price controls”.
In Scotland, the Scottish National Party (SNP) has promised a similar policy that would require major supermarkets to cap the cost of up to 50 popular food products.
Sir Keir Starmer’s government is under pressure to tackle rising costs of living as food prices continue to rise in the UK and there are concerns about the economic impact of the US-Iran war.
The survey last month showed 85 percent of adults are concerned about rising food prices; This rate increased compared to 83 percent in February.
It was revealed that 15 per cent of households are deprived of certain foods and one in 10 people (that’s three million families) skip meals to manage their weekly budget.
The SNP accused the Labor government of “abandoning the cramped middle” and called on chancellor Rachel Reeves to go “much further” to help struggling households.
Inflation eased last month, but household energy bills are expected to rise from July, when the regulator sets the next price cap.
A Treasury spokesman said: ““The Chancellor has made clear that we want to do more to help keep costs down for families and we will announce further details in due course.”
