Food bank users 'reject potatoes' because they can't pay to boil them, says Iceland boss

22 March 2022, 22:00 | Updated: 23 March 2022, 14:35

People who depend on food banks for food are turning down potatoes and root vegetables because they cannot afford the energy to boil them, the boss of Iceland said today.

Richard Walker said the cost of living crisis is the "single most important domestic issue" the country faces.

His comments come as pressure mounts on Rishi Sunak to unveil new plans to help struggling households in his Spring Statement.

The managing director of Iceland said this morning: "We're hearing about some food bank users declining potatoes and root veg because they can't afford the energy to boil them."

He said business was "not an endless sponge that can soak it all up".

Mr Walker suggested energy price caps for consumers could be extended to businesses, potentially paid for by a windfall tax, a cut in VAT, or even placing green taxes on hold.

The Chancellor, who will deliver his spring statement on Wednesday, will link the stability of the UK economy to standing up to Russian President Vladimir Putin against his invasion of Ukraine.

But despite Mr Sunak's tough words for the Kremlin, he faces a crisis at home as Labour accused him of being the "high-tax Chancellor", and the Federation of Small Businesses (FSB) urged him to do more.

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Mr Sunak is expected to outline further plans to support households facing financial hardship.

But he is expected to tell MPs in the Commons that having a strong economy is vital in tackling Moscow's aggression.

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"So when I talk about security, yes - I mean responding to the war in Ukraine," he is expected to say.

"But I also mean the security of a faster-growing economy, the security of more resilient public finances, and security for working families as we help with the cost of living."

However, those struggling to pay their energy bills will be hoping for new support from Mr Sunak, as charity Citizens Advice said it was "continuing to break unwelcome records" by "issuing more food bank vouchers and referrals to charitable support than at any point since the start of the pandemic".

Dame Clare Moriarty, the organisation's chief executive, said: "In his Spring Statement, the Chancellor has a crucial opportunity to stem the tide of this cost of living crisis.

"Increasing benefits in line with inflation, expanding the Warm Home Discount and announcing a more generous energy rebate should be top of his list."

Tory MP Mark Harper told Nick Ferrari at Breakfast on LBC this morning: “We’ve had to make some difficult decisions. You can’t just keep borrowing money.

“If people want to cut taxes or spend more money they’ve got to set out how to pay for it. The Chancellor’s got to balance those things.”

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MPs were told on Tuesday that the measures which had already been announced were "insufficient for the scale of the crisis we're facing".

Gillian Cooper, head of energy policy at Citizens Advice told the Commons Business, Energy and Industrial Strategy Committee committee: "We have to recognise that there are millions of households that are simply unable to cope with the energy bill increases that we're going to see this year."

MoneySavingExpert founder Martin Lewis told the committee that energy companies were upping customers' direct debits disproportionately to the price cap increase, even for those in credit.

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The rocketing energy bills faced by households was caused in part by a post-pandemic rise in demand for gas, with lower levels of production.

This was only exacerbated by the war in Ukraine, both due to energy supplies but also the production of wheat and some metals.

A planned rise in National Insurance contributions and changes to income tax, combined with forecasts that wages will rise slower than inflation, will also hit households.

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A briefing from the House of Commons library said the cost of living across the UK has been rising since early 2021, while in January this year inflation reached its highest recorded level since 1992.

The Chancellor has already announced a £200 loan to gas and electricity payments from October - although not until the price cap jumps 54 per cent.

Plus, certain households will get a £150 council tax rebate in April.

The Treasury has said the measures announced so far add up to around £21 billion of support this year, taking in the rebate, changes to Universal Credit, and the freezing of fuel and alcohol duties.

But Mr Sunak is also expected to set how a new culture of enterprise, urging the private sector to train, invest, and innovate more.

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Other options available to him include a cut to fuel duty or adjustments to VAT in certain sectors. The Resolution Foundation think tank has suggested an uprating of benefits, while there have been calls to scrap the planned National Insurance rise.

Labour, however, unveiled analysis claiming Mr Sunak was on track to have raised more tax than any chancellor in 50 years, with 15 tax rises in the last two years.

They said the "high-tax Chancellor" had added an extra £27.3 billion onto the tax burden of UK businesses and householders since the 2020 Budget.

The party is expected to say Mr Sunak is now faced with a choice over a rise in national insurance to further hit households, or to impose a one-off windfall tax on oil and gas producers.

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Shadow chief secretary to the Treasury Pat McFadden said: "Over a decade of Tory Government, the economy has grown far slower than when Labour was in power, and it is set to grow even slower in the coming years."

The Office for Budget Responsibility previously said that by the end of this Parliament the tax burden as a proportion of GDP would be at its highest level in 70 years and Labour said no other G7 economy was putting up tax on working people this year.

Meanwhile, the Office for National Statistics (ONS) said interest payments on Government debt jumped to £8.2 billion last month, up from £5.4 billion a year earlier and the highest for any February on record.

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Paul Wilson, policy director at the FSB, urged the Chancellor to take action.

"We've been talking about these issues for a number of months and we very much understand why so much attention is on domestic consumers, but the test will be what actions are taken tomorrow in light of the severity of the challenges," he said.

It comes as consumer group Which? found just one in 10 people believe the economy will improve over the next 12 months - and nearly three-quarters think the situation will get worse.