Rishi Sunak has been told the plans ‘will not make a jot of difference’ (Picture: Getty Images / PA)
The government’s plans to encourage supermarkets to impose voluntary price caps on basic foods has been met with heavy criticism.
Rishi Sunak is understood to be drawing up proposals asking retailers to limit the amount shoppers pay for essential items such as bread and milk to help with the cost of living crisis.
But the UK’s major supermarkets have condemned the idea, while at least two cabinet ministers are also said to oppose the policy.
Tesco, Sainsbury’s, Morrisons and Waitrose backed a statement released by the British Retail Consortium (BRC) questioning the measures, according to The Telegraph.
Andrew Opie, director of food and sustainability at the BRC, said: ‘This will not make a jot of difference to prices.
‘As commodity prices drop, many of the costs keeping inflation high are now arising from the muddle of new regulation coming from government.
‘Rather than recreating 1970s-style price controls, the government should focus on cutting red tape so that resources can be directed to keeping prices as low as possible.’
Downing Street plans to encourage supermarkets to introduce price caps on basic items such as bread and milk (Picture: Shutterstock)
One cabinet minister said you ‘can’t interfere in markets’ because it ‘doesn’t work in this day and age’.
They told The Telegraph: ‘There is an international market for wheat and it is quite expensive after what’s happened in Ukraine.Â
‘If you drive down the price of bread, it can be sold elsewhere. We live in global markets and it’s very different to what happened in the 70s and after the war.’
Opposition MPs also ridiculed the plans yesterday and compared them to pricing controls introduced by Conservative prime minister Edward Heath in the 1970s.
A No 10 source said the proposal is still at ‘drawing board stage’ but stressed they would only be implemented at retailers’ discretion.
The prime minister has faced backlash for the ‘1970s-style’ price caps plan (Picture: Getty Images)
A Government spokesperson said: ‘The government is not considering imposing price caps. Any scheme to help bring down food prices for consumers would be voluntary and at retailers discretion.
‘We know the pressure households are under with rising costs and while inflation is coming down, food prices remain stubbornly high.Â
‘That’s why the prime minister and the chancellor have been meeting with the food sector to see what more can be done.
‘We continue to support households through our £94bn package, worth £3,300 on average per household this year and last.’
If introduced, the opt-in scheme, modelled on a similar agreement in place in France, would allow supermarkets to choose which items they cap.
The government says any scheme to help bring down food prices would be at retailers’ discretion (Picture: PA)
But that aspect of the scheme has led critics to question whether it would have any effect on costs, while right-wing think tank the Institute of Economic Affairs (IEA) branded it a ‘pointless gimmick’.
IEA economics fellow Julian Jessop said: ‘Caps on food prices are at best a pointless gimmick and, at worst, harmful to the very people they are supposed to help.
‘It is not even certain that the prices of capped goods would end up lower than if there were no cap.’
It comes after chancellor Jeremy Hunt backed interest rate hikes – even if they risk plunging the UK into recession – in order to combat soaring inflation.
Although down from 10.1% in March, the Consumer Prices Index of inflation remained stubbornly high at 8.7% in April, while food is still alarmingly expensive.
Earlier this month, it emerged that one million people in the UK have been forced to cancel their broadband packages due to the cost of living crisis.
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No 10 is drawing up plans to limit the price of basic foods.Â
