It’s not food that’s too expensive – It’s your house

The Scottish Government’s Programme for Government for the year was published yesterday and we’ll be covering it in more detail in our Friday Magazine (subscribe here if you haven’t already) but there is one aspect of it that we’d like to cover now given that it was pushed out slightly before the PfG itself as part of a Government Consultation that we’ll no doubt be submitting an official response to in due course. The Scottish Government’s proposal to cap the price of basic and essential food.

Unlike many commentators, Common Weal isn’t against the concept of food price caps. We’ve been advocates of policies like Zohran Mamdani’s public grocery shops since before he popularised them. Price controls on basic foodstuffs have been an essential and core part of economic management for centuries and it was really only the post-WWII dash for unrestrained capitalism that made them unfashionable. Governments have – from ancient times and even in the modern era – been torn down over the rising price of rice and bread.

However we do have concerns about the Government’s approach to the price caps. Our initial read of the consultation gives us the impression that the policy was announced without there being much thought on how to implement it and so they are now canvassing for views. Consultations like this are often somewhat technical and can be tricky for the lay civilian to respond to (though do not let that stop you) and so the responses may end up being dominated by supermarkets and their lobbying arms disguised as ‘consumer groups’. It is unlikely that these organisations will be in favour of making less profit on their goods.

Unless there is a strong campaign to the contrary, it’s very likely that the Government will adopt a ‘Minimum Promised Deliverable’ approach to this policy. A price cap is set higher than the current price of the basic foods it covers and which increases by more than inflation (like the Scottish Government’s rent control scheme) so that there’s no risk of any supermarket breaching the cap would be the least the Government could do and still be able to tell folk that they’ve met their promise to cap the price of bread.

The problem is that it is quite hard to see how this is going to prove to be legal. The UK Single Market Act, on the face of it, would appear to prevent any market-distorting policy which would alter ‘free trade’ across the border. The Court of Session ruled that the Deposit Return Scheme distorted the UK market so it is hard to see how a price cap does not do the same.

And there’s another underlying problem in all of this. Capping the price of basic foods might well be an essential and good idea, but the fact that you can’t afford to buy food is a symptom of a wider economic crisis. Wage stagnation, Profit Extraction and the push to turn everything from a one-time purchase into a rent-seeking subscription are eating into your income to the point that by the time you’ve paid your rent/mortgage and utility bills you have nothing left except for the basics. If you’re struggling to buy basic bread, you certainly can’t afford to go to a restaurant for a nice meal with friends, which is a big part of why the local economy of your high street is struggling too.

In upcoming publications we’ll be laying out the scale of the impacts of income and wealth inequality in Scotland and showing how those rent-seeking activities are eating into your cost-of-living far more than the price of bread is. Simply put: Even if your wages have kept up with inflation (which they may not have), you are likely to be spending a greater percentage of that wage on housing costs and other bills before you even think about food.

Tackling this will require better rent controls in the short term, using public policy to push out the private sector from housing in the medium term and total public ownership of energy in the longer term.

We’ll be covering the Programme for Government in more detail on Friday but it’s clear already that many of the Government’s ambitions and stated policies run directly contrary to that plan, with a heavy focus on “foreign direct investment” in areas such as housing and energy, ensuring the maximum possible amount of profit will be extracted from your rent/mortgage and energy bills so that it can be exported to overseas shareholders.

The price cap on food is not necessarily a bad idea – so long as it actually caps the price of food. But maybe we should be asking why we’re being forced to spend as little as possible on food in the first place? Maybe we should be demanding that we are able to spend a little more on food (and on the friends and family we eat that food with) and a lot less on keeping a roof over our head even when the cupboards are nearly bare.