BBC Expert Compares Government Price Cap Plan To Venezuela

A government plan to ask supermarkets to voluntarily cap the prices of certain products to tackle the cost of living crisis has echoes of Venezuela, according to the BBC’s business editor.

Simon Jack said it could even lead to food shortages amid a mounting backlash to the idea.

The Financial Times reported that the Treasury had spoken to supermarkets about offering “incentives” to encourage them to cap the price of essentials like eggs, bread and milk.

That could include easing packaging policies and delaying potentially costly changes to healthy food rules.

On Radio 4′s Today programme, Jack said: “The British Retail Consortium said the history of price controls is not a good one. A lot of people will be forced to potentially sell things at a loss, and when that happens people stop making them.

“If you look back through history, whether it’s the US in the 70s or Venezuela more recently, you can end up with food shortages when you try and impose price controls.”

Economist Paul Johnson said he was “lost for words”.

He posted on X: “Never thought I’d see a British government trying to set food prices. If there is one highly competitive sector it is food retailing.

“Do we really want to live in a country where the state sets these prices?”

But Treasury minister Dan Tomlinson said price controls “isn’t something we’re looking at”.

He told Sky News: “The government is not looking at doing this.

“Instead, what we’re doing is looking across the economy at what are the different ways that we can help households.”

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