The Parliamentary Under-Secretary of State, Department for
Environment, Food and Rural Affairs (Lord Benyon) (Con) My Lords,
with the leave of the House, I shall repeat an Answer to an Urgent
Question in the other place from my right honourable friend the
Environment Secretary: “The global spike in oil and gas prices has
affected the price of agricultural commodities. Agricultural
commodity prices have always been closely correlated with energy
costs, since gas is used...Request free
trial
The Parliamentary Under-Secretary of State, Department for
Environment, Food and Rural Affairs () (Con)
My Lords, with the leave of the House, I shall repeat an Answer
to an Urgent Question in the other place from my right honourable
friend the Environment Secretary:
“The global spike in oil and gas prices has affected the price of
agricultural commodities. Agricultural commodity prices have
always been closely correlated with energy costs, since gas is
used to manufacture fertiliser and fuel energy is needed
throughout the food chain. Gas prices were rising as we emerged
from the pandemic, but the invasion of Ukraine has caused some
additional turbulence in international commodity markets. I have
already set out measures to support farmers and growers in
England ahead of the coming growing season. Those measures are
not a silver bullet, but they will help farmers to manage some of
their input costs from fertilisers.
The turbulence of the market has brought into focus again the
importance of a resilient global supply chain and the importance
to our national resilience of having strong domestic food
production. In the UK, we have a high degree of food security. We
are largely self-sufficient in wheat production, growing 88% of
all the wheat that we need. We are 86% self-sufficient in beef
and fully self-sufficient in liquid milk, and we produce more
lamb than we consume. We are also close to 100% self-sufficient
in poultry. Sectors such as soft fruit have seen a trend towards
greater self-sufficiency in recent years, with an extended UK
season.
As part of a global market, however, there have been pressures on
input costs and prices. As a result of those rising input costs,
there are of course also some pressures on households,
predominantly as a result of the energy costs. There have also
been some rises in food prices in recent months, although the
ferocity of retail competition means that price pressures have
been contained on certain product lines.
In March, overall food prices rose by 0.2%; the price of fruit
actually fell in March by 1.2%. In April, however, food prices
rose by about 1.5%, which is a faster rise than we have seen in
some years. On specific categories of food in April, bread and
cereals rose by 2.2%; sugar, jams and syrups rose by 2%; the
price of fish rose by 2%; and meat rose by 1.9%. Vegetables,
including potatoes, rose at a lower level of 1.3%, and fruit
remained broadly stable. The price of oils and fats decreased
slightly in April by 1.1%.
The single most important measure of household food security and
the affordability of food remains the household food survey that
Defra has run for many decades. That shows that, among the
poorest 20% of households, consumption on food was relatively
stable at around 16% of household income between 2008 and 2016.
It then fell slightly to 14.5%, but with the recent price
pressures, we can expect it to return to those higher levels of
around 16% in the year ahead.
We are monitoring the situation. The Government have put in place
an unprecedented package of support to help those who need it.
That includes targeted cost of living support for households most
in need through the household support fund, where the Government
are providing an additional £500 million to help households with
the cost of essentials.”
11.52am
of Ullock (Lab)
My Lords, there is no doubt that global events, including
increased oil and gas prices, are contributing to both food and
other forms of inflation. However, the Government’s response is
clearly insufficient, with even the head of the CBI claiming that
there is a moral imperative for the Chancellor to prevent
households having to skip meals. The Secretary of State may feel
that a few percentage points on food prices is a cause for
concern. Does the Minister acknowledge that more than 2 million
adults in the UK have gone without food for a whole day in the
past month because they cannot afford to eat? Defra’s various
schemes to support domestic producers are welcome, but when will
the Government wake up to the situation and use an emergency
Budget to put in place the support that families need right now
to get through this difficult period?
(Con)
My Lords, as announced in the very recent Spring Budget, the
Government are providing an additional £500 million to help
households with the cost of household essentials from last month.
That is on top of what we have already provided since October
last year, bringing the total funding of this support to £1
billion. We have also increased the minimum wage to £9.50; we
have announced a rebate on council tax; we have announced a
rebate on energy bills; and, in England, £421 million will be
provided to extend the existing household support fund. A lot is
being done. I absolutely share the noble Baroness’s concern for
those households that are in difficulty. The Government are
monitoring this at every stage that they can and will continue to
respond accordingly.
(Con)
My Lords, there are not many forces working on food prices, but I
think that it is generally agreed that soaring international
prices for oil and gas are one of the main drivers. There seems
to be a resigned view among Ministers that there is nothing much
that we can do about this. That is not correct. Our ports at the
moment are jammed with frozen gas ships ready to deliver gas into
the system and bearing down on all gas prices, which ought to
benefit consumers. Internationally, there is substantial spare
capacity in oil production; if we have the right diplomatic
initiatives and work with others, we can get that going as well.
Both these things would have a far bigger effect on reducing the
inflation of energy and food than any other single measure. Can
the Minister encourage his colleagues in the Foreign Office to
get on and focus on this major and central issue?
(Con)
My noble friend is absolutely right that it is crucial that we
create more stability and coherence in international supply
chains. That is of course massively important in terms of energy.
We are working with other countries; indeed, we very much took
the lead in working with the World Bank to create an
unprecedented amount of money to support those countries that
depend in particular on food from countries from which we do not
import much, such as Ukraine and Russia. It is about making sure
that we ease those supply chains, right across the globe.
(CB)
My Lords, yesterday, the CBI, of which I am president, had
Ambassador Vadym Prystaiko at our annual dinner. He spoke
movingly and explained that, at the moment, it would take five
years to get the grain out of Ukraine using rail and road, unless
the ports are unblocked. What can the Government do to lead the
way in international efforts to unblock Odessa port so that the
grain can get out? Otherwise, we have the danger of famine around
the world. Secondly, with regard to what the Bank of England
governor referred to as an “apocalyptic” rise in food prices,
surely the best way to address that is to reduce taxes, which are
at the highest level in 70 years. Consumers and businesses need
help now.
(Con)
To the noble Lord’s point about Odessa and getting grain out of
Ukraine and on to the world market, it is of course a war zone.
While this war ebbs and flows, there may be opportunities for the
international community to get involved in precisely what he
rightly points out is important. We do not know. However, I can
assure him that we are working extremely hard with other
countries and the Government of Ukraine to try to achieve this.
There was talk earlier about trying to find some sort of land
bridge to get some of this produce on to the world market, but
that is more difficult. On his last point, of course the
Chancellor deals with fiscal matters, but I point out that we
have increased the threshold below which people pay income tax,
which directly impacts many people on low or modest incomes. It
is those sorts of things that have much more impact on household
incomes than some of the suggestions that we have had to
date.
(Con)
My Lords, does my noble friend share my concern that fruit and
vegetable prices may increase because there are no Ukrainian
workers coming over? How advanced is the scheme that my noble
friend is looking at to bring Ukrainian women and their families
over, and would it not be a wonderful idea to accommodate them at
RAF Linton, which has family accommodation for both the women and
their children?
(Con)
I am not aware of the details of that last point, but we are
working very closely with the sector. Our information is that
there are concerns, but it is thought that they are containable
and that the fruit and vegetables will be harvested and available
for our domestic market. I assure my noble friend that we are
monitoring this daily with the industry to make sure that we are
getting this right.
(LD)
My Lords, this is indeed a very weighty and wicked issue. In this
House, it behoves us to focus down on the harsh realities of the
impact of rising food prices. I do not know whether noble Lords
saw this yesterday, but I was shocked to hear the BBC reporting
on the shrinking of school meals as food prices rise. Children
who are on free meals are, by definition, the poorest in the
country. Can the Government guarantee that the inflation of food
prices will not see these children suffer even more? They deserve
at least one square meal a day.
(Con)
There are very defined standards on school meals and I would want
to know more details about how or why they are nutritionally
deteriorating in the cases mentioned in that report—I did not see
it myself. I can assure the noble Baroness that, yes, of course,
rising food prices have an impact on the public sector. Millions
of meals are served every day in the National Health Service, in
old people’s homes, in prisons and in the Ministry of Defence, so
the Government are feeling this as well. It is important that our
most vulnerable people, particularly children on free school
meals, are getting not just that meal but also one that is
nutritious and health-giving.
My Lords, I thank the Minister for his replies on this important
area, but is he concerned, as a number of people are, that some
farmland is now being taken out of production because it is being
bought by companies for carbon offset? Indeed, one of the issues
about some of the rewilding is that, sometimes, good farmland,
which could help us, is now not available. What are Her Majesty’s
Government doing to increase our food production, both for our
own security but also so we can export to help those other
countries that are facing huge hikes in prices?
(Con)
Rewilding Britain is the campaigning organisation promoting
rewilding and I think it has a target of 5% of the United Kingdom
by the end of this century, which will not have an impact on food
prices. It will, because of the change in the way we are
supporting farmers, be bits of land that most farms can make
available for ecological use rather than food production, without
at all impacting on the food we eat. However, the right reverend
Prelate raises a very important point about the way that some of
the trillions of dollars of so-called ESG money is being spent in
certain areas. The Government are taking this very seriously,
because the S in ESG matters; the social dimension of how this
money is spent, in what is called green finance, is really
important. We need to protect our food security in the future and
we are looking at this—not just ourselves in England but working
with the devolved Governments to make sure that ESG money is
being spent in a way that is honest, is not greenwash and does
not curtail our ability to continue to feed ourselves.
(Lab)
My Lords, the Statement said nothing about Ukraine, although
other noble Lords have mentioned it. Is the Minister not aware
that the production of corn, fertiliser and oil from Ukraine is a
very significant part of world production? Is that not going to
affect not only prices and availability here, but maybe a greater
movement towards famine in other parts of the world? I think many
noble Lords agree that it is very unlikely that the material will
be got out of Ukraine in the volumes necessary unless the ports
get opened—which they probably will not.
(Con)
I am sorry that the noble Lord missed my reference to Ukraine,
which underpinned the whole basis of this Question, because I did
mention it and it is fundamental. He is absolutely right that it
does have an effect, not so much on this country in terms of the
wheat we use—because we produce 88% of what we need and the
remainder is imported mainly from countries such as Canada, with
which there is no problem—but in the fact that this is a massive
global issue. That is why Britain, for example, has led, with the
World Bank, on getting $180 billion going to those countries that
now face real difficulties. We heard earlier about what India has
done as a result of its heat difficulties. We are very concerned
about the global marketplace and the ability of some vulnerable
countries to cope; that is why we are working with international
bodies to help solve this.
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