More face choice between heating and eating in austerity Britain

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Lord Knight of Weymouth calls on the government to do more to combat rising food and fuel prices against stagnant wages.

As unemployment looks set to rise again this week, the backdrop for most people looks pretty bleak. Inflation is also rising and the news from Europe is draining what little hope was left after the government's disastrously premature deficit-reduction decisions. Little wonder people are saying that the light at the end of the tunnel has just been switched off.

The government's last inflation figures showed energy prices rising by over 18 per cent in the last year and food prices by over six per cent. The latest international comparisons showed food prices rising faster in the UK than anywhere else in Europe apart from Hungary.

This double whammy of food and fuel prices is hitting hard as average wages also stagnate. Whilst the Commons debates fuel prices on Tuesday I am continuing to press the government in the Lords on what they will do about the cost of food.

Given that government doesn't produce food or directly tax it, it is fair to ask what could be done. I think there are three areas for urgent action:

• bankers are gambling with food prices in the commodity markets to such a distorting extent that there is a growing international demand for better regulation to protect consumer prices. The government should be looking at how to lead commodity market reform.
• the Common Agricultural Policy is estimated to cost every family in the UK £300 per year in higher prices. The EU Commission is currently consulting on reform that fails to deliver for consumers or food producers. The government must show how it will create a consensus in Europe on CAP reform to help consumers.
• the proposed Groceries Regulator could ensure consumers are better served by supermarkets and their supply chain. Current proposals limit the ability of the regulator to act, and prevents it fining retailers for unfair practices. The government should resist the powerful lobby from supermarkets and give the regulator teeth.

Poorer people spend more of their income on food and fuel. If the government wants to restore any credibility when it said “we're all in this together”, it must do something urgently about the rapid rise in these two areas of people's budgets. None of us want to go back to the days in the recessions of the eighties and nineties when the most vulnerable in our communities faced the cruel choice between eating and heating.

Jim Knightis the former Labour member of Parliament for South Dorset (2001-10). He served as minister for the South West 2009-10. He was raised to the peerage in 2010.