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  5. Price cuts will lead to food shortages, Rishi Sunak warned.

Политика

Price cuts will lead to food shortages, Rishi Sunak warned.

Sunak has been compared to a 'modern price-controlled Edward Heath' Photo: Ben Stansall, WPA Pool/Getty Images.

Rishi Sunak has been warned that his 1970s-style price cap plan will lead to food shortages amid backlash from cabinet ministers and supermarkets.

Downing Street plans to ask retailers to agree to price ceilings on certain essentials, such as bread and milk, to keep food prices down and fight inflation.

But the proposal was denounced by big supermarkets and angered at least two cabinet ministers, who said it would involve too much intervention in markets and could lead to shortages as suppliers take their goods overseas.

One A Cabinet minister told The Telegraph that the price caps last used in the UK in the 1970s would not work «these days» and that groceries would be «sold elsewhere» if supermarkets refused to raise prices.< /p>

Tesco, Sainsbury's, Morrisons and Waitrose backed a British Retail Consortium (BRC) statement saying the plan, first published by The Telegraph, «won't change prices one iota» and accused Sunak of «recreating the 1970 style th years». price control.»

One retail executive said, «This is a crazy idea, and instead of trying to interfere with supermarket pricing, the government would be better advised to address the root causes of inflation.»

Mr. Sunak has set himself the goal of halving inflation to five percent by the end of 2023, and has asked the Treasury to find ways to lower prices following the sharp rise in the cost of living caused by the war in Ukraine.

This promise is seen as central to the Conservatives' statement before the public at the next general election and prompted Jeremy Hunt, the Chancellor of the Exchequer, to admit that he would accept a UK recession if it would bring down inflation.

«You can't interfere with the markets»

The latest figures show that inflation fell from 10.1% to 8.7% after Mr. Sunak made his pledge, but ministers are concerned that he has become a pawn of luck.

Food prices nutrition rose 19.1% this year. near a record high by April.

“The problem is that inflation is out of our control,” a senior government official said Sunday night.

Mr. Sunak's plan mimics a similar pattern in France, where retailers have pledged to freeze prices to create an «anti-inflationary quarter» between April and June and be subject to spot checks to ensure they don't restrict their suppliers.

Hypermarket chain E.Leclerc refused to participate in the scheme, saying it would give the impression that prices of other goods would rise to make up for the shortfall.

Michel-Edouard Leclerc, its CEO, said, that it «is more likely to be cheaper across the board.»

Many government sources have expressed doubts as to whether the policy will ever be implemented in the UK following backlash from ministers and retailers.

The Cabinet Minister said: “There is an international market for wheat and it is quite dear after what happened in Ukraine. If you bring down the price of bread, it will be possible to sell it elsewhere.

“You can't interfere in the markets, in our time it does not work. We live in world markets, and this is very different from what happened in the 70s and after the war.”

Food Inflation

A spokesman for the Second Cabinet Minister confirmed that they are opposed to this policy.

A government spokesman insisted that it «is not considering imposing price caps» and that «any scheme to help bring down prices on food for consumers, will be voluntary and at the discretion of retailers.

Steve Barclay, health secretary, acknowledged that small, family-owned businesses would themselves come under «significant pressure» and stressed that the plans «do not contain coercive elements.»

Bill Grimsey, Iceland's former boss, told The Telegraph, that price controls in the 1970s were «very bureaucratic and didn't work», but that ministers were right to worry about today's prices because the market was «not competitive enough with the real-time needs of consumers».

An industry source warned that shelves of essential goods could be emptied due to the policy, exacerbating egg shortages caused by high energy prices and measures to combat bird flu.

>»If they don't can set fair prices for their products, farmers can just stop production, which is what happened with eggs,» they said.

«Or they could switch production to something for which they could get a fair price that is not subject to a price cap.”

The Edward Heath of the Last Days

In a statement on behalf of the industry, the BRC suggested that supermarkets would reject any ministerial-directed price cuts.

Andrew Opie, director of the food and sustainability organization, said: prices. High food prices are a direct result of soaring energy, transport and labor costs, as well as higher prices paid to food producers and farmers.

“However, fierce competition in the UK food market has helped keep British food among the most affordable of all major European economies.

“Instead of recreating 1970s-style price controls government should focus on reducing red tape so that resources can be devoted to keeping prices as low as possible.”

Price controls were introduced in November 1972 by the Conservative government of Edward Heath in an attempt to stop rising inflation . His party lost the next election 15 months later.

Jonathan Ashworth, secretary of underground work and pensions, said: “This is extraordinary. Rishi Sunak is now like the Edward Heath of the last days with price controls.»

Mr Barclay said: «I understand the government is working constructively with supermarkets on how we are dealing with very real food problems. inflation and the cost of living, and to do so in a way that is mindful of the impact on providers.”

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