Healey warns against profiteering on food and fuel, drawing retail backlash
UK Chancellor John Healey has said the government stands ready to stop the public being 'taken for a ride' on prices, while retailers argue the focus should be on the government's own tax increases. The warning comes as the Middle East conflict reignites cost-of-living pressures, with the Bank of England warning inflation could top 4%.
Chancellor John Healey has warned that the government is prepared to intervene to prevent consumers from being 'taken for a ride at the pump or the till' as the war in the Middle East continues to push up prices. In a weekend newspaper column, he said there was as yet 'no significant evidence of so-called price gouging' during the crisis, but that ministers were 'watching closely' for any signs of profiteering.
Healey's remarks highlight a tricky economic balancing act, as the energy price shock caused by the months-long conflict rekindles Britain's cost-of-living crisis. Last week, the Bank of England held interest rates steady but cautioned that a further escalation in the Iran war could push inflation above 4% next year, adding to financial strains on households.
Writing in the Sunday Telegraph, Healey said the conflict not only threatens national security, UK bases, personnel and allies in the Middle East, but also economic security by affecting the family finances of millions of British people. He acknowledged that many businesses are also under pressure from rising costs, adding that conflict and uncertainty increase inflation, threaten growth and raise costs for both businesses and governments.
The profiteering comments set the stage for a fresh war of words between the government and retailers. Earlier this year, it emerged that Rachel Reeves, then chancellor, had floated the idea of capping food prices to curb inflation driven by the Middle East conflict. That proposal drew a sharp backlash from supermarket executives, with Marks & Spencer chief executive Stuart Machin calling it 'completely preposterous'.
On Sunday, the British Retail Consortium urged the new chancellor to instead examine how tax increases, including employers' national insurance contributions and business rates, affect inflation. Andrew Opie, of the BRC, which represents major grocers such as Sainsbury's, Tesco and Asda, said supermarkets operate in a highly competitive environment and offer the most affordable food in western Europe. He added that the Competition and Markets Authority has repeatedly found that fierce competition between retailers, not government action, has kept food prices as low as possible.
