Food For Thought

by Rab Bruce’s Spider

 

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John Swinney’s announcement that he intends to impose price caps on supermarkets selling basic essential foodstuffs has caused quite an uproar. On the City AM website the other day, I saw one writer describe it as “ludicrous” and “insane”. It was the usual anti-Scottish diatribe we have become so accustomed to, and I wonder how the author feels now that news has emerged that the UK Government has been in discussions with supermarket bosses about price caps.

 

Needless to say, the supermarket bosses have come out strongly against this idea, and the UK Government now seems to be back-tracking quite vigorously.

 

But is this policy a good idea? Or is it just a bad idea because greedy capitalism demands that the public must be exploited for every penny? Interestingly, a little research suggests that the UK Tory Government held similar discussions a few years ago but decided, naturally enough, to allow free market competition to set prices. That has worked out pretty well as anyone who shops regularly can testify. For all their claims about matching prices to the lowest available, everyone’s shopping bills have gone up by a ridiculous amount, and I’m sure the majority of people, especially those on low incomes, would welcome some price freezes on essential foodstuffs.

 

As for it being a ludicrous idea, few in the media seem to be reporting that other countries have tried it recently. In the years just after covid, Hungary and Croatia imposed food caps, as did several other Balkan countries. Greece imposed a profit margin cap rather than a price cap, and even France came to an agreement with supermarkets to limit prices, although that was more voluntary than a legally imposed cap.

 

So it has been done before, although all the cries from the food retail industry seem to ignore that.

 

But can it work? Well, while the public would welcome it, the experiences in those other countries suggest that it might not be such a great idea in the long run. Adhering to greedy capitalist ideas, the supermarkets who had price caps imposed on essential items simply hiked the prices of items which were not covered by the cap. Or they rationed the number of items people could purchase, even buying in less of them so that they would not be forced to sell without making large profits. This, naturally, resulted in food shortages. And there is also the issue that a price cap will ultimately harm the suppliers of milk, eggs, flour, etc rather than the supermarkets themselves.

 

So there are pitfalls and dangers to watch out for, and if John Swinney does proceed with this idea, he’s going to have to make sure that the imposition is drafted very carefully to prevent these problems arising. Quite frankly, I’m not sure how he can do that. Supermarkets are, after all, run for the benefit of their shareholders, not for the benefit of the general public, and their principal aim is to increase their profits. Many of them make such eye-watering sums that you’d think they could easily absorb the cost of a price cap on some goods for a few months, but that isn’t how capitalism works. After all, these are the same organisations who pay their staff such poor wages that many of them rely on social security just to make ends almost meet. Bizarrely, the UK media has a long-established habit of attacking social security claimants as scroungers, but it would be more accurate to say that it is the supermarkets who are scrounging off the state by paying such low wages. Not that they are alone in this. Far too many jobs pay the minimum wage which is simply not sufficient to cover the ever-spiralling cost of living.

 

Finally, let us not forget that, under the Internal Markets Act, anything the Scottish Government does attempt on this front will almost inevitably be struck down by Westminster. That should serve as a reminder that the Labour Party, who opposed the Internal Markets Act when it was first brought forward, have done nothing to repeal it because they know it gives them the ultimate power to decide what happens in Scotland. I think the best that can come from this is that the Scottish Government puts forward legislation to restrict prices, then waits for the UK Government to overrule the law. That will hopefully result in howls of outrage from a lot of people in Scotland, and should provide a bit more ammunition for pushing on with the even more important business of turning Scotland into a normal, self-governing country. I do hope John Swinney really does have a workable plan on that front.