Food Prices and Food Poverty

Luciana Berger Excerpts

Monday 23rd January 2012 Commons Chamber

[Mary Creagh]

I pay tribute to Newham’s Labour council and I find it amazing that, at a time when councils are experiencing a 28% cut to their revenue, they are still managing to subsidise school meals or, as in Newham, to fund completely free meals. What a tragedy it is that that scheme cannot be extended to secondary schools there. I will return to the issue that my hon. Friend raises about school holidays.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

Does my hon. Friend share my great concern that the removal of extended schools money means that many schools cannot afford to put on breakfast clubs? Many children who would previously have gone hungry if they had not got breakfast through a breakfast club are returning to a situation in which they do not have food in their stomachs, and so cannot learn and are not getting a healthy start to the day.

[Mary Creagh]

It is a tragedy that both breakfast clubs and after-school clubs are under threat. The chef Richard Corrigan did a film for Sky called “Richard Corrigan on Hunger” in which a lady who runs clubs that are provided for by a charitable provider, Magic Breakfasts, talks about children being admitted to hospital in the school holidays for malnutrition—that comes back to the point made by my hon. Friend the Member for West Ham (Lyn Brown) about the challenge that school holidays pose for families’ food bills—and scurvy appearing in children of primary school age, which I find deeply shocking.

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[Mrs Spelman]

Shortly, my hon. Friend will hear me expand correctly on the analysis of what is driving food price inflation.

It is important to remember that in 2010 the average family spent 11.5% of its household budget on food. The figure is greater for low income families, at 15.8%, but it is coming down; the 2010 figures are 1% lower than two years previously. That is a very important fact—the trend is that household expenditure on food in the lowest income families is coming down.

[Luciana Berger]

I do not know whether the Secretary of State has seen the figures released by the OECD last week. They showed that in the UK food prices rose by 4% in the last year, which is 0.7% above the EU average.

[Mrs Spelman]

The hon. Lady needs to understand the contributory factors. The depreciation of sterling makes imports of food in other currencies stronger than ours more expensive. It is important to read the figures in the context of exchange rates and the other factors that drive up inflation.

The Government are, of course, actively finding ways to help mitigate the rises. But the Government cannot do it all, and they should not pretend that they can. Since the removal of production linked support in 2005, crops and livestock are traded on a global market. It is those markets that dictate food prices. As has been pointed out, the key drivers of domestic retail food price inflation include world agricultural commodity prices.

I hate to have to tell the hon. Member for Wakefield, but if she is to have this brief she needs to learn that the wheat price has not been stable; it has fluctuated in recent years from £60 a tonne to more than £200 a tonne. There are also oil prices and exchange rates. In 2008, although the price of wheat fell in dollar terms, it increased in sterling terms because of the relative weakness of sterling to the dollar. To understand the causes of food price inflation, one has to analyse correctly the underlying drivers.

World commodity prices are the key driver and we are working hard internationally to ensure the better functioning of commodity prices at the global level. That, in turn, will affect food prices at home. The depreciation of sterling has made dollar-denominated commodities more expensive. Furthermore, global weather extremes have caused shortages that drive prices up.

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[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

I congratulate my Front-Bench colleagues on securing today’s debate on this relevant and topical issue. I wish to use this opportunity to highlight the national scandal of rising poverty.

Some people find it hard to believe that food poverty really exists in this country. Last year, I was aghast to hear the former Conservative MP, Edwina Currie, say on BBC radio that she had “great difficulty” believing that people in Britain went without food. Only last week, the Secretary of State for Work and Pensions said that people are not suffering as a result of benefit changes. Perhaps they have not seen the very real and tragic situation that thousands of families and pensioners face this winter, and perhaps they have not been affected by the 4% rise in food prices over the past 12 months. However, the thousands who are forced to queue for handouts, in lines that stretch through church halls and community centres across our country, certainly are, and they include people who struggle to balance housing costs and rising energy bills, and the mums and dads who go hungry so that their children do not have to. With rising prices, higher living costs and falling wages, it is becoming more difficult for people to make ends meet. The consumer prices index shows that the average household spends 12% of their income on food, meaning that a couple with two young children spend more than £5,000 a year on food. In addition, according to the OECD figures that we have discussed a great deal this afternoon, 4% food inflation has added an extra £233 to that bill over the past year alone.

It is even harder for lower-income households to cope. DEFRA’s own statistics show that they have to spend 15.8% of their income on food—nearly 3% more than the average household. While jobseeker’s allowance for a single adult is £67.50, it is just not possible to eat healthily on £8 a week or just over £1 a day. Last May, I did the “Live Below the Line” challenge, which was organised to raise money for charities in Africa, and I lived on £1 a day for food and drink for five days. I did not have enough protein, and I got headaches. I could afford just one of the five recommended pieces of fruit and veg a day. I endured that for just five days: there are over 4,000 people in my constituency for whom that is a reality 365 days a year.

It is therefore not surprising that fruit and vegetable consumption in poorer families fell by 30% last year. It is even harder to buy food when the support to which someone is entitled is not paid on time, as I found out when I visited a Trussell Trust food bank in my constituency just before Christmas. I met a man who had walked in the freezing rain to get to the food bank. The week before, he had been in hospital recovering from heart surgery. When he came out of hospital, he was told that he would have to wait a number of weeks for his benefit payments to be reinstated. He was hungry. His district nurse had given him a food voucher, but he could not afford the bus or a taxi. He had to walk more than four miles. He was a desperate man.

That is one of three food banks operating across Liverpool. We have five in total across Merseyside providing desperately needed assistance to people who cannot afford to buy food. The figures show that the largest proportion of people seeking emergency assistance—just under 40%—do so because of delays in receiving benefit payments. With the Chancellor’s austerity programme sucking growth out of our economy and pushing up inflation and employment, it is clear that, Her Majesty’s Revenue and Customs and a reduced Department for Work and Pensions cannot cope with the demands placed on them. That is set to get worse, as it is estimated that over the next three years HMRC will lose 10,000 more staff, and DWP is set to lose 17,000 staff.

In my constituency in the past nine months, 312 people were issued with food vouchers for themselves and their families, which entitled them to at least three visits to the food bank, but the food bank would never turn them away if they needed anything more. That situation is not unique to Liverpool. There has been a huge growth in food banks across the country, with one opening every week last year. Contrary to what the Secretary of State for Environment, Food and Rural Affairs believes, I do not think that that is something to celebrate. As my hon. Friend the Member for Wakefield (Mary Creagh) highlighted, according to the Trussell Trust, the fantastic charity that runs 163 food banks across the UK, in the past 12 months, 60,000 people received help from food banks, including 20,000 children. It predicts that 130,000 people will need help this year.

My hon. Friend the Member for Bolton West (Julie Hilling) highlighted the fact that those figures are set to rise to 500,000 by 2015. The figures are staggering and awful but, faced with that crisis, the Government have pursued out-of-touch policies that are making the situation worse, not better. They are making it harder for families and pensioners to make ends meet and to cope with the rising cost of living. Tax rises and spending cuts that go too far and too fast are choking off economic recovery, pushing up prices and leading to soaring unemployment.

That reckless plan has backfired on the deficit too, with more people out of work and claiming benefit rather than paying taxes, meaning that the Government will not balance the books by 2015 as they promised. It is time to change course and get our economy growing to create more jobs. DEFRA should play its part by putting the food industry—the largest manufacturing sector in the UK—at the heart of the economic recovery and getting a fair deal for British farmers and food manufacturers. We want a competitive supply chain for growers, processors and retailers.

The Secretary of State for Environment, Food and Rural Affairs was pressed earlier about when the groceries code adjudicator will be introduced, but we did not receive clarification. We are concerned that the office will not be up and running until at least 2014-15. As price rises are 0.7% above the EU average at 4%, we need action now, and we also need to act to protect consumers from vested interests. The grocery market is dominated by four big supermarkets, which account for about 85% of the total market. Nine out of 10 people are concerned about rising food prices, and over half of them are comparing prices more when shopping for food. However, only 53% of people think that it is easy to work out which product is better value for money using the price information available on labels. Consumers need transparent pricing from the major retailers to make it easier to compare goods so that they can make informed choices. Under Labour proposals, retailers would provide clearer unit pricing for goods, with information that is easier to read, and with unit prices for promotional offers.

Today’s motion sets out to put right the failed approach of this Government, who are out of touch with the families and pensioners facing the squeeze from rising living costs. The approach set out by Labour in the motion would help the thousands of men, women and children who cannot afford to eat properly this winter, introducing measures to get our economy moving and securing a fair deal for British farmers and consumers. Unlike the Secretary of State, I do not welcome the escalation in the number of food banks: there are already three too many in Liverpool, and 163 too many across the UK. It is a tragic and terrifying indictment that we have food poverty in 21st-century Britain, one of the richest nations in the world, and that food poverty is rising. The Government must do anything and everything to reverse the situation in which over 100,000 people this year cannot afford to buy food to eat. I urge everyone to vote for the motion.

[Several hon. Members]

rose—

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[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

I compliment my hon. Friend the Member for St Ives (Andrew George), who bowled the hon. Member for Ogmore (Huw Irranca-Davies) and hit the middle stump, showing the paucity of the motion. I offer advice to the hon. Gentleman and his colleagues—they simply cannot support the wording in the motion. It is a sign of desperation to pray in aid somebody who has not been in the House for 15 years when referring to Conservative or any other policy.

It is clear from this afternoon’s debate that Members on both sides of the House take seriously the challenges posed by food price inflation. It is also clear that down the years Governments of different complexions have seen varying degrees of price volatility. Of course I agree with hon. Members on both sides that wonderful work is done by charities and other organisations to support people on low incomes. That has always been the case. But please can we not pretend that in some parallel universe those charities were all forced into action on 6 May 2010 and that their existence is totally the result of the coalition Government? That is such a puerile and facile argument. Let us have a mature debate. I hope to add some thoughts in the few moments that I have.

Some Opposition Members have sought to ascribe the responsibility for high prices to the coalition. Clearly, that is undermined by the fact that food prices were rising at a faster rate under the previous Government. Likewise, we know that food price inflation was outstripping general inflation at one point last year, only for the situation to be reversed later in the year. The dynamics of where food prices stand at a particular point in time are of secondary importance to hard-pressed families who are balancing their budgets. Those families want to know what action is being taken to help, not just by Government, but by a range of organisations that have a distinguished track record in this regard.

We have heard of some excellent initiatives in the area of food provision and redistribution. We know about Healthy Start, which is a Government initiative. We have heard about FareShare, which provided 8.6 million meals in the last financial year. Many hon. Members have spoken about food banks, which are organisations set up by wonderful, community-minded people with real compassion. We applaud their activities. However, I say to Opposition Members, in particular the hon. Members for Liverpool, Wavertree (Luciana Berger) and for Bristol East (Kerry McCarthy), that it is ridiculous to say that the rise in the need for food banks is attributable to this Government. This Government spend £122 million a day just to pay the interest on the debt that their Government left us. That is what we have to spend before we even pay off the debt.

[Luciana Berger]

Will the Minister give way?

[Richard Benyon]

No, I will not give way.

The motion is almost entirely consumed with statements about the introduction of the groceries code adjudicator. We agree on the importance of introducing an adjudicator. That is why we have published a draft Bill and are getting on with putting it in place. What is rather more puzzling is the position of the Opposition, who wasted 13 years without introducing the adjudicator, even though they knew that power was shifting from the suppliers to the retailers and had received evidence on that. Despite that, they criticise this Government for not having completed the process in 18 months.

The motion refers to “delays”. The only element of delay is in the motion itself, which demands that the adjudicator be introduced in the next Parliament. The hon. Member for Ogmore explained that that was a drafting error. In that case, he must tell Members not to support the motion. Any Member who supports it is showing a paucity of ambition, because it means that they want the adjudicator to be introduced early in the next Parliament. The hon. Gentleman will have to withdraw the motion. That is the only thing to do. The hon. Member for Wakefield (Mary Creagh) might want to wait until after the next general election to introduce the adjudicator, but the coalition has no such intention. We will carry on with the work in hand and bring it in during this Parliament.

Aside from the rather narrow focus on the adjudicator, there has been a series of interesting and useful contributions on the work that can be done to mitigate food prices. I pay great tribute to my hon. Friend the Member for South Thanet (Laura Sandys) and wish her social enterprise well. It sounds like an interesting idea. I pay tribute to my hon. Friend the Member for Thirsk and Malton (Miss McIntosh), who made some interesting comments about the social impact of the threat of high food prices. I confirm for her that the groceries code adjudicator will consider anonymous submissions. She talked in particular about the fruit and vegetable sector. Those suppliers can approach the groceries code adjudicator anonymously.

The hon. Member for Llanelli (Nia Griffith) asked when the groceries code adjudicator would be introduced. I hope that we have answered her question. The draft Bill is available. I cannot second guess what will be in the Queen’s Speech. I would be in trouble if I did.

My hon. Friend the Member for Congleton (Fiona Bruce) spoke about local and home-grown food. I pay tribute to what is happening in her constituency. My hon. Friend the Member for St Ives was absolutely on target. He sought, as I do, cross-party consensus because on these issues this House sometimes produces more heat than light. If we look at the matter in detail, we see that there is a lot more that we agree on than separates us.

The Government are hugely supportive of food banks and other organisations that work to open up access to food. The coalition Government have been clear from the outset about the importance that they attach to third sector and civic activity. The success of many organisations in this area demonstrates why we are right to work hand in glove with them in delivering social solutions.

This debate has demonstrated the extent to which food price inflation is shaped by an intricate matrix of interrelated global circumstances. To stand here and pretend that the Government can step in and bring down food prices at a stroke would be disingenuous. The Government can put measures in place to ameliorate the worst effects of food price inflation, which we are doing through measures such as our continued support for Healthy Start and other schemes. One of the biggest determinants of food prices is global and domestic supply, and this Department has put farming and food production at the heart of its business plan. Whether it is in stripping away the needless bureaucracy that has swamped farmers, developing a strategy for balancing the needs of greater food production with protecting our environment, or helping to fund innovation and increased competitiveness, this Government are highly attuned to the need to increase high-quality food production domestically.

My right hon. Friend the Secretary of State is personally driving a great deal of work with other countries to help to meet the food supply challenges set out in the Foresight report. We are investing time and energy to ensure that we are working hand in glove with others on that important challenge. Understandably, the effects of that will take time to be felt.

The fact is that there is no silver bullet. The Opposition should know better than to pretend that the adjudicator will be the cure-all for hard-pressed families. What families need now is for the Government to deliver real help right now to get living costs down to a manageable level. To that end, the Opposition should support freezing the council tax, cutting fuel duty, cutting income tax for 25 million people, extending free child care, increasing the child tax credit, taking action on energy prices and many other measures. They were strangely silent on those measures throughout the debate. That is the programme that the coalition Government will continue to deliver in parallel with our work to increase food security and keep food prices down.

I believe that the House is united in its concern for those who struggle to manage their food bills. That is as it should be. However, this debate has laid bare the absence of any ideas from the Opposition. That is in marked contrast to the practical steps that the coalition is taking to help hard-pressed families up and down the country. On that basis, the motion should be rejected.

Question put,