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/briefings/ways…
