Chancellor Rachel Reeves has asked supermarkets to consider voluntarily limiting the price of essential groceries such as bread, milk and eggs, as part of broader efforts to address the rising cost of living. The proposal, reported by the Financial Times, would see retailers cap prices in exchange for potential regulatory changes from the Treasury, including easing packaging rules and delaying some planned reforms on healthy food standards.
Industry Criticism
The idea has drawn sharp criticism from the retail industry, which warned against what it described as '1970s-style' price controls. The British Retail Consortium (BRC) said the Government should instead focus on reducing the policy costs that are contributing to higher food prices. Helen Dickinson, chief executive of the BRC, urged ministers to avoid interventionist measures and instead tackle the wider pressures driving inflation.
“The challenge facing retailers is a combination of higher energy and commodity costs resulting from the Middle East conflict and the soaring cost of the Government’s domestic policies,” she said. Dickinson also argued that strong competition between supermarkets has helped keep UK grocery prices relatively low compared with other Western European countries.
Government Response
Ministers have moved to play down the idea of formal intervention. Treasury minister Dan Tomlinson said the Government was not planning to introduce a mandatory cap, although he confirmed discussions with retailers are ongoing. “This isn’t something we’re looking at,” he told Sky News. “The Government is not looking at doing this.” He added later: “Of course, the Government is going to be having conversations with supermarkets about what more we can do to support households, but no, we are not going to be implementing a mandatory price cap.”
Retail Leaders React
Industry figures have reacted sharply to the reports. Marks & Spencer boss Stuart Machin said he had 'no direct communication' with ministers on the proposal and warned against government interference. “It’s completely preposterous,” he said. “I don’t think the Government should be trying to run business. My advice is that the Government should reduce some of the tax and regulatory burden and free us up in a very competitive market.” He added that food retailers were already absorbing costs to protect customers, noting that some staple products, such as milk, bread and bananas, are sold at a loss.
Former Asda chairman Lord Stuart Rose was even more blunt, branding the idea 'stuff and nonsense'. “This smacks of state control,” he told BBC Radio 4’s Today programme. “It is idiotic. It is dangerous and it will never work.”
Further Details
A Treasury spokesperson said: “The Chancellor has been clear we want to do more to help keep costs down for families and will set out more detail in due course.” According to the Financial Times, the Treasury has also asked supermarkets for assurances that British farmers will not see their incomes hit by any voluntary price caps. Some of the regulatory measures under consideration, including packaging rules, also generate revenue for the Exchequer.
The paper reported that ministers have suggested supermarkets reinvest savings from any regulatory changes into price freezes for consumers. The discussions come as UK food inflation rose to 3.7% in April, adding further pressure to household budgets. On Tuesday, the Foreign Secretary warned at an aid summit of the risk of 'sleepwalking into a global food crisis' following Iran’s blockade of the Strait of Hormuz, a key global shipping route.
Upcoming Measures
Chancellor Rachel Reeves is due to set out further measures to help households with the cost of living on Thursday. Writing in The Times, she said she had taken decisions which were 'responsible in the national interest'. “I will not tolerate anyone exploiting a crisis to make a quick buck off the back of hardworking people,” the Chancellor wrote. “I am clamping down on price gouging, giving regulators new, focused investigatory powers. Where regulators identify concerning practices, they will be encouraged to name and shame.”
