Contribution
As ever, it is a pleasure to serve with you in the Chair, Dame Siobhain. I thank the hon. Member for Hornsey and Friern Barnet (Catherine West) for securing the debate.
For many people across the country, rising food prices are one of the most concrete ways in which the cost of living crisis impacts their lives. Thanks to rising costs, many families simply do not have enough money left at the end of the month to save for a home, plan a holiday or even send their children on a school trip.
In general, prices rise because of three things. First, they can rise because too many people want too few goods. If the demand for something grows faster than the supply, the price will of course rise. We saw that in the immediate aftermath of Russia’s invasion of Ukraine. The supply of Ukrainian wheat fell, demand stayed the same and global food prices rose.
Secondly, prices can rise because it becomes more expensive to produce goods in the first place. To keep earning enough to survive, the people who produce those goods will need to increase their prices to cover their growing costs. As my right hon. Friend the Member for Salisbury (John Glen) mentioned, we see that today, as this Government’s energy policies create the highest industrial energy prices in the developed world. Higher energy prices for businesses mean higher production costs, causing prices to rise. The same is true of higher taxes or greater regulatory costs, both of which this Government have imposed on businesses of all kinds.
Thirdly, prices can rise because of external factors, which can also be in response to Government policy. If the Government increase the supply of money, say, or keep interest rates too low, people will be more likely to spend, reducing the relative value of the pound in their pocket and, again, causing prices to rise.
If we talk to anybody involved in producing food in this country, we will hear a lot about the second cause. Costs are rising and prices are rising with them. As I mentioned, that is due partly to energy costs, but also partly to the vast sums food producers must spend to comply with the regulations they need to navigate if they ever want to sell their products.
Let us take dairy farms as just one example. What hurdles must a dairy farmer in Kent, in my constituency, clear if they want to sell milk, cheese or butter? To even begin the process, all dairy farmers must register with the Food Standards Agency as a dairy producer. If they want to turn some of their milk into cheese or butter, they must also get a separate approval as a food business establishment.
Cows must be kept according to regulations set out under the Animal Welfare Act 2006 and the Welfare of Farmed Animals (England) Regulations 2007, which include rules on space, housing and veterinary care. The herd must be regularly tested by the Animal and Plant Health Agency for tuberculosis and brucellosis. They must be specifically protected to minimise contact with badgers, with the construction of specific fences and feeding facilities. Farmers must also create and implement a hazard analysis and critical contact point plan identifying all potential contamination hazards and setting out plans to minimise them. They must test for certain bacteria and must be prepared for unannounced inspections by the Food Standards Agency.
If farmers want to sell milk, they must comply with the Drinking Milk (England) Regulations 2008, which define the appropriate fat content for different sorts of milk and sets out specific rules on pasteurisation. If they want to turn the milk into cheese, they must comply with certain compositional standards, including rules on protected designations for specific regional varieties. If they want to turn the milk into butter, they must comply with the Spreadable Fats (Marketing Standards) and the Milk Products (Protection of Designations) (England) Regulations 2008, including rules on additives and fat percentage.
Then there are rules on labelling and marketing, on mandatory written contracts on milk sales to regulate pricing, and on manure spreading and waste management. If farmers want to adapt their buildings or extend them, they need to navigate the labyrinth of our planning system. Then and only then are they allowed to sell their milk, butter or cheese, and the price in the shops will need to reflect all the costs I have just mentioned if they want to keep the farm running.