Name and shame ‘shrinkflation’ culprits, Reeves urged
The Chancellor has been called on to take measures in the upcoming Budget to “embarrass” companies that increase the price of their products while reducing their size.
This phenomenon, known as ‘degrowth’, has become evident during the ongoing cost of living crisis; Although inflation has slowed recently, food prices remain high for many people.
Supermarkets should be given the power to label offending products to ensure greater transparency in food prices, the Institute for Public Policy Research (IPPR) has said.
This document consists of a series of recommendations made by the think tank ahead of the fiscal event on 26 November. Researchers have called on the chancellor to declare a “war on bills” and put living costs at the center of his economic agenda.
Other measures put forward include forcing smaller supermarkets to stock cheaper unbranded products and ensuring the same deals are offered in these locations as in larger stores.
Consumers have long been warned that smaller supermarket chains could charge sky-high prices for essentials. Analysis from which one? Last year it was found that customers could pay more than £800 a year more if they shop at these places.
IPPR also calls for cutting energy bills by subsidizing electricity costs, reducing solar energy costs and taking into account the excess profits of energy network companies.
The think tank’s “shameful” call on those to blame for the contraction echoes demands put forward by the Liberal Democrats in June but not accepted by the government.
Last month consumer group Which? Big brands have been seen reducing the quality as well as the size of popular products, with some materials being downgraded for cheaper alternatives.
Examples included Aquafresh Complete Care Original Toothpaste, whose price rose from £1.30 for 100ml to £2 for 75ml, a 105 per cent increase in price per 100ml at Tesco, Sainsbury’s and Ocado.
In another case, Which? It found that KitKat Two Fingers Milk Chocolate Bar multipacks dropped from 21 bars to 18 bars, while the price on Ocado rose from £3.60 to £5.50, a 53 per cent increase.
The researchers suggest that the interventions recommended by the IPPR would not be significantly costly, but would be effective in meeting the government’s mission to improve the cost of living.
Managing the cost of essential goods remains a daily struggle for millions of people in the UK as prices continue to rise faster than household incomes. Inflation pressures have caused food prices to increase by 35 percent since 2019, while energy costs have increased by 50 percent since 2021.
Recent research by the Çözüm Foundation has revealed that living standards have stagnated over the past 20 years, with average income increasing by only 7.6 percent since 2006. During the same period, food prices increased by 70 percent and energy costs increased by 119 percent.
Sam Alvis, IPPR’s deputy director for environment and energy security, said: “The cost of living is still the public’s number one concern. A government that declares a ‘war on bills’ and means it can show that it is fighting on the side of working people. Small but visible actions, repeated over time, are the best way to prove that the government can make life fairer and more affordable.”
Ministers in recent weeks have hinted the government could scrap or replace the two-child benefit cap, which campaigners say is keeping more than 600,000 people in poverty. On Tuesday, Ms Reeves signaled the measure could be changed in the Budget, saying “a child should not be punished just because their parents don’t have a lot of money”.
Some tax increases are also expected as part of the fiscal event; It is understood that measures ranging from an overhaul of the council tax system to a simple increase in the headline rate of income tax (despite commitments in the manifesto) are being considered.
A Treasury spokesman said: “We do not comment on speculation about future changes to tax policy other than financial events.
“The Budget at the end of this month will create stronger foundations for securing Britain’s future and focus on workers’ priorities: cutting waiting lists, reducing the national debt and lowering the cost of living.”
