Jul 2008 07

Politicians should stop blaming the people for high food prices7

Farm

Wasted food isn’t to blame for high food prices, so why is Gordon Brown intervening in the kitchen?

Ordinary people do waste food.  The efforts of environmentalists have made things worse by discouraging the use of packaging that prevents spoilage.  A large part of the problem is simply that people are more likely to buy their food in a large weekly shop (due to long-term societal changes such as the increase in the number of women working) and have to estimate how much they’ll need.  They’ll err on the side of having enough when food isn’t that expensive, and another trip to the shops is an inconvenience, and food will be wasted.

However, with prices rising people will be more cautious and wastage should decrease.  It isn’t a significant problem that needs a political solution.  Neither is it the cause of the current rapid rises in global food prices.  The reason why Gordon Brown has suddenly decided this is an issue he should address isn’t that he seriously thinks a sudden outbreak of wastefulness is making a major contribution to rising food prices.  He’s trying to send a message to hard-pressed families grappling with high food prices that he isn’t to blame; it’s their fault.  If this doesn’t work he’ll probably move on to attack the supermarkets.

Brown is hoping that he can create enough of a distraction for voters to miss that it is the politicians who are the real problem.  Here are five ways, among others, politicians contribute to high food prices:

  1. Biofuels.  A leaked World Bank report suggests that biofuels have increased food prices by up to 75%.  The United States is the biggest offender with its huge corn ethanol subsidies but our Government has just introduced the Renewable Transport Fuel Obligation which will mean Britons are forced to burn large amounts of what could otherwise be food in their cars, driving up prices.
  2. The Common Agricultural Policy.  High import tariffs keep out foreign competition and push up prices.
  3. Motoring taxes.  Transporting food for production or to market is more costly when petrol prices are high.  Taxes constitute two thirds of the price of petrol and, therefore, have a significant impact on the cost of bringing food from the field to the plate.
  4. Excessive food safety regulations.  Christopher Booker and Richard North, in their recent book, describe how many companies involved in producing food have been crippled by excessive or unjustified regulation.  This reduces competition and will push up prices.
  5. Energy taxes and regulations.  At various stages in the process producing many foodstuffs uses substantial amounts of energy.  Government regulations, such as the Renewables Obligation, increase the price of energy and therefore further drive up the cost of food.  Ofgem estimate that green regulations make up 8% of the average household electricity bill and they will make a substantial contribution to industrial energy costs as well.

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  • gildedtumbrils

    Britain is afloat,but only just, on an ocean of debt,and burdened with extortionate taxes. Shortly the taxes will exceed the debt and Britain will sink inexorably under the waves. In order to ameliorate the discomfort those initial survivors will need to plough up all parks, pitches and golf-courses.We must dig for victory!

  • Graeme Pirie

    I’d like to see a reporter stationed outside No.10 going through the bins.
    Any chicken bones found that have not been used to make soup for the Browns should result in a public flogging to give an example to us all….

  • Richard Garland

    The energy crisis was our fault for leaving tv’s on standby.
    The fuel crisis was our fault for not using inefficient expensive public transport.
    The crisis in education and school selection was our fault for pushing our children and telling white lies to get our children into the best school.
    Now the price of food is our fault for wasting some.
    Is this Government not responsible for anything !

  • Johnbluk

    Perhaps this has something to do with it also…
    The UK faces being hit by massive EU fines over its continued reliance on landfill sites for rubbish with the taxpayer picking up the bill.
    The Government has been slammed by MPs for failing to respond quickly enough to an EU directive which set tough targets on the amount of waste that can be sent to landfill.
    If it misses its targets the UK, which sent 18m tonnes of waste to landfill in 2003-2004, will have to pay fines to the European Commission which could total £180m per year.
    read more here…
    http://www.telegraph.co.uk/earth/main.jhtml?xml=/earth/2007/10/30/ealandfill130.xml

  • http://thepurplescorpion.blogspot.com John Page

    It was good to hear on R4 6pm news that some had thought his comment reminiscent of post-WW2 rationing – a régime where the grim Scot would have felt at home.
    Congratulations on a very good post. Maybe Cameron could ask him at PMQs what his government can do to make food cheaper!

  • Graham Morris

    Do you think that income tax should be the main way in which taxes should be raised ? (see Adam Smith’s “Wealth of Nations”)
    Indirect taxes are distorting the market.
    GDM

  • john Graham

    Mr Brown of course overlooks the fact that a substantial component of food is actually TAX and blames us-the people- for wasting it as a rationale for high prices, The shops all pay TAX in terms of Business rates and income tax and NI plus council tax on the shopkeepers residential. VAT is charged on the vehicles used to transport it plus of course “duty tax”, corporation tax is charged on profits VAT is applicable to lighting and heating plus all the equipment used in shops ( the companies producing it also have to meet all of the previous taxes as well) just because there is no visible tax on food on the price ticket doesn’t mean that it isn’t actually there in substantial quantities.