𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Supermarkets are calling on the government to delay or scrap new taxes and regulations as they fight to keep costs under control during the Iran war.

The cost of food is expected to be 50 per cent higher by November than at the start of the cost of living crisis in 2021, the Energy and Climate Intelligence Unit think tank has warned.

The British Retail Consortium (BRC) said food retailers have already taken a £6.5bn hit from higher employment taxes in the past two years, alongside a new packaging tax that costs £1.6bn.

Other new rules, such as guaranteed hours under the Employment Rights Act and the Nutrient Profiling Model, which forces shops to rejig how they market thousands of food lines, will also increase costs, it said in a fresh warning about rising food costs on Wednesday.

A poll for the BRC by Opinium found that 80 per cent of people are worried the Middle East conflict will further increase food costs.

Its chief executive, Helen Dickinson, said: “The Middle East conflict is driving up costs across the supply chain and families are right to be concerned. But not every pressure bearing down on retailers comes from the Gulf.

“Higher national insurance, packaging levies, new regulations, and business energy charges are all domestic policy decisions, made in Westminster, and they can be addressed there. Such action by government would help retailers to keep prices affordable for households.”

A report in The Times on Monday said ministers were reviewing an environmental levy called the extended producer responsibility tax (EPR), which charges shops for every item of packaging used. Retailers said it would be welcome news if this “stealth tax” were at least delayed, but they have not heard from the government.

Last week, the Bank of England warned that inflation, now at 3.3 per cent, could rise to 6.2 per cent by the start of 2027. Food inflation could hit 7 per cent by then, it warned.

Ms Dickinson added: “Other governments are already acting. Germany has reduced electricity costs for businesses by moving levies off bills and EU leaders are actively discussing similar responses to this crisis. The UK should be moving in the same direction, not treating global instability as cover for inaction on costs of its own making.”

Last month, the bosses of the biggest supermarkets were called in to meet chancellor Rachel Reeves amid hints that the government fears grocers are using the war to put up prices and boost profits.

The Treasury insisted at the time that it was a “fact-finding, open discussion” on what could be done about the cost of living.

Allan Leighton, the chairman of Asda, said at the time that the government needed to “stand up and start doing stuff” to help farmers.

Retailers have said they are already absorbing extra costs on shipping, distribution and fertiliser from the Iran conflict. These costs will filter through to consumers at some point, warns the BRC.

The poll found that four in five people (80 per cent) fear the conflict will push up food prices, while 73 per cent expect it to raise the price of other products. Meanwhile, 81 per cent are worried about rising energy bills, 76 per cent about petrol and diesel, and 68 per cent about tax increases.

Anna Taylor, the executive director of the Food Foundation charity, said: “Food prices rising this high and this fast leaves families on the lowest incomes with nowhere left to cut except the food on their plate. When that happens, people skip meals, children go hungry, and diet-related illness rises – taking parents out of work and piling pressure on an NHS that can least afford it.”

The Treasury has been contacted for comment.