John McDonnell – 2022 Speech on the Cost of Food
The speech made by John McDonnell, the Labour MP for Hayes and Harlington, in Westminster Hall, in the House of Commons on 14 December 2022.
It is important in these debates that we try to get to the roots of what the cause of this food crisis is. We will be told that it is largely to do with the crisis in Ukraine. I believe that it is actually to do with supermarkets profiteering and world global speculation on the food markets.
With regards to supermarkets profiteering, as my hon. Friend the Member for Jarrow (Kate Osborne) said, Tesco has doubled its profits, while those of Associated British Foods have increased by 48% and those of Lidl by 319%. Now is the time for an excess profits tax to ensure that we prevent food speculation at the national level.
In addition, there is speculation at the global level. As I have said time and again on the Floor of the House, we saw this during the banking crash, when billions were moved from the sub-prime housing market into the food commodity market, creating a famine. As a result, we introduced regulation, MiFID II, which put position limits on how much of an individual food commodity could be held by speculators. However, the Government have now introduced the Financial Services and Markets Bill, and in Edinburgh last week the Chancellor announced further deregulation of the market system, meaning that that regulation will be lifted. Instead of regulation by Government or the Financial Conduct Authority, food commodity limits will be handed over to the traders themselves—the very people who are making profits out of this speculation.
Let us put in context the argument that somehow Ukraine has caused this crisis. Ukraine produces 3% of the world’s wheat and 2.6% of the world’s corn—the basic food stuffs. This is about speculation and profiteering. It is not just me saying this about deregulation. The Governor of the Bank of England today stated his anxieties about the Government going too far on deregulation overall, and not learning the lessons of the banking crash. People will starve as a result of profiteering and speculation. That is why we need an excess profits tax and regulation of the food commodity market along with our partners globally.
Finally, I know people do not want to talk about Brexit, but if we look at the London School of Economics analysis, we see that £6 billion has been put on our food bills over the last two years—that is 3% a year. We have got to sort out a new deal on Brexit.
