The British government is advancing proposals to cap prices on everyday essentials such as milk, bread, and eggs in supermarkets, aiming to shield consumers from the economic repercussions of the Iran war. Unlike the strict price controls of the 1970s, these measures would be voluntary, with retailers agreeing to limit costs on staple items.
Details of the Proposal
According to the Financial Times, the Treasury is negotiating a deal where supermarkets would voluntarily cap prices on essential goods. In return, the government would offer incentives, including easing packaging regulations and delaying costly changes to healthy food rules. The Treasury has also requested guarantees that British farmers would not suffer income losses from these caps.
Industry Reaction
Helen Dickinson, chief executive of the British Retail Consortium (BRC), criticised the approach, stating: "Rather than introduce 1970s style price controls and trying to force retailers to sell goods at a loss, the Government must focus on how it will reduce the public policy costs which are pushing up food prices in the first place." She highlighted that the UK already has the most affordable grocery prices in Western Europe due to fierce supermarket competition.
Government Justification
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." Prime Minister Keir Starmer acknowledged that the UK will feel the effects of the Middle East conflict both short and long-term, but emphasised that the government's economic plan has taken long-term decisions to protect the country from global shocks.
Context and Contingency Planning
After chairing a meeting of the Middle East Response Committee, Starmer noted ongoing contingency work to ensure public services are prepared, including targeted support for heating oil and other measures for those most in need. The meeting focused on supply chains, transport, energy, and business sectors.
