Labour ministers have denied claims that the Government is considering supermarket price controls after reports suggested officials explored voluntary caps on essential groceries as part of efforts to ease mounting cost-of-living pressures.
Dan Tomlinson, a Treasury minister, rejected suggestions that ministers had approached retailers about limiting the cost of staple items such as bread, milk and eggs.
“This isn’t something we’re looking at,” he said during a broadcast interview, insisting the Government was not pursuing food price caps despite growing concern over inflation and household finances.
The denial followed a Financial Times report claiming ministers had discussed a voluntary arrangement with supermarkets under which retailers would freeze or cap prices on selected essential goods.
According to the report, the Government was prepared to offer incentives in return, including easing packaging regulations and delaying potentially costly healthy food rules.
The proposals reportedly emerged amid fears inside Whitehall that rising fuel and commodity costs linked to instability in the Middle East could feed through into another wave of food inflation later this year.
The idea drew immediate criticism from the British Retail Consortium, which warned ministers against drifting towards what it described as “1970s-style price controls”.
Helen Dickinson, the organisation’s chief executive, said the Government should focus instead on reducing policy costs imposed on retailers, arguing that supermarkets were already operating in one of the most competitive grocery markets in Europe.
She warned that forcing retailers to absorb rising costs risked creating further pressure across supply chains already strained by energy prices and wider inflation.
Food inflation climbed to 3.7 per cent in April, intensifying pressure on ministers as household budgets continue to come under strain despite the recent fall in headline inflation.
Officials are understood to have sought assurances that any voluntary pricing measures would not reduce payments to British farmers, amid concerns the burden could simply be shifted further down the supply chain.
Some of the regulatory concessions reportedly discussed — including changes linked to packaging requirements — currently generate revenue for the Treasury, raising questions over whether ministers are prepared to trade tax income for lower prices at the tills.
A Treasury spokesman said the Chancellor wanted “to do more to help keep costs down for families” and would outline further measures shortly.
Rachel Reeves is expected to unveil a broader package of cost-of-living support measures on Thursday as Labour attempts to reassure voters over inflation, fuel prices and weakening consumer confidence.
Writing in The Times, the Chancellor struck a combative tone towards businesses accused of profiting from economic instability.
“I will not tolerate anyone exploiting a crisis to make a quick buck off the back of hardworking people,” she said.
The episode is likely to fuel wider criticism from opponents who accuse Labour of drifting towards greater market intervention as economic pressures intensify.
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