Government plans to encourage supermarkets to impose price caps on food staples to help with the cost of living will have no “element of compulsion”, a Cabinet minister has said.
Downing Street is understood to be drawing up proposals that would seek to get retailers charging the lowest possible amount for some basic products like bread and milk.
The opt-in scheme, modelled on a similar agreement in France, would allow supermarkets to select which items they would cap, the Sunday Telegraph reported.
It could mark the biggest intervention on pricing since controls introduced by Edward Heath in the 1970s, the paper reported – though No 10 stressed any scheme would be voluntary.
Asked about the proposals on the BBC’s Sunday With Laura Kuenssberg programme, Health Secretary Steve Barclay said: “My understanding is the Government is working constructively with supermarkets as to how we address the very real concerns around food inflation and the cost of living, and doing so in a way that is also very mindful to the impact on suppliers.”
Mr Barclay acknowledged small family-run businesses would themselves be under “significant pressure” and stressed that the plans were “not about any element of compulsion”.
A No 10 source said the proposal is at “drawing board stage” but would not involve Government-imposed price controls.
It comes after Chancellor Jeremy Hunt backed interest rate hikes – even if they risk of plunging the UK into recession – in order to combat soaring inflation.
Although down from 10.1% in March, the Consumer Prices Index of inflation remains stubbornly high at 8.7% in April, while experts have warned that alarmingly expensive food is set to overtake energy bills as the “epicentre” of the cost-of-living crisis.
Food prices are expected to keep rising, having already increased by 19.1% in the year to March, placing additional pressure on families.