Food prices will rise and the cost of a family shop will go up by £220 a year if the UK leaves the EU without a deal, a new study warns. Researchers at the University of Sussex found the cost of food will increase by 7% on average next year in a no-deal scenario.
This comes as households are experiencing a tighter income squeeze now than during the 1990s recession and a report this week revealed 4 million people in the UK are trapped in deep poverty, struggling to afford the most basic essentials.
Food bank charity the Trussell Trust called for a “dedicated hardship fund” to help those affected by any rise in food prices after Brexit, warning there are limits to how much they can prepare.
Supermarkets’ no-deal warning
Sainsbury’s, the Co-Op, Lidl and Asda have warned that a No Deal outcome could lead to empty shelves and rising prices, with Sainsbury’s warning that a No Deal exit in October would be particularly difficult to respond to because of strained warehouse capacity ahead of Black Friday and the Christmas holidays.
Jeremy Corbyn accused Boris Johnson of “gambling with people’s lives” by threatening the country with a “totally avoidable” no-deal Brexit, as the University of Sussex analysis revealed that a no-deal outcome will cost families an extra £220 next year as a result of rising food prices – equivalent to nearly an extra monthly food shop.
Foodbanks at all-time high
Ahead of a visit to a food market in Scarborough on Friday, the Leader of the Labour Party, said:
“In threatening the country with a totally avoidable no-deal Brexit, the new Prime Minister is gambling with people’s lives. The impact on food prices, jobs and our manufacturing industry will be disastrous.
“After nine years of austerity holding down people’s pay, with foodbank use at an all-time high and with millions of people living in poverty in one of the richest countries in the world, a hike in food prices will be unaffordable for many families.
“Instead of handing out tax cuts to the richest and staking all our futures on a trade deal with Donald Trump that risks the takeover of our NHS by US corporations, the Prime Minister should rule out No Deal and concentrate on improving the lives of people struggling to get by.”
Bank of England governor Mark Carney also warned that a deal-less break would be an “instantaneous shock” on the economy and cautioned the pound would plunge even lower than it already has. It is at $1.21 – a historic low, lower than during most crises the UK has faced. The Bank of England also warned that leaving the EU with no deal would mean Brits felt a punishing rise in inflation in their pockets and the country’s GDP would slow.
Hardship funds
Garry Lemon, the Trussell Trust’s director of policy, external affairs and research, said: “Any form of Brexit risks increasing the cost of food and essentials, and therefore increasing need for food banks.
“We’re giving Brexit guidance to food banks – but there’s a limit to how much we can prepare for and mitigate its consequences.
“The responsibility to prevent more people being pulled into poverty lies with our government.
“We cannot rely on support driven by volunteers and food donations to pick up the pieces, particularly in the event of no-deal.
“To anchor people from poverty as Brexit unfolds, our government must ensure additional protections such as a dedicated hardship fund are in place throughout, alongside an end the five-week wait for Universal Credit payment.”
A record 1.6m emergency food parcels were given out by the Trussell Trust food bank network last year – more than 500,000 of them to children.
Leaked government reports
The Trussell Trust’s warning came as a leaked document from the Cabinet Office and seen by The Guardian, warned of a risk of “panic buying” exacerbating food supply disruption as well as a threat of civil disorder.
The document circulated throughout Whitehall warns ministers that in a no-deal Brexit“low income groups may be disproportionately affected by price rises in utilities and services” and by “price rises…including food and fuel”.
The paper said that the leaked document revealed an an acknowledgement that Britain is actually less able to cope with a hard Brexit than it was in the spring, with the real risk of panic-buying in the run-up to Christmas and civil disorder if the country leaves the EU without a deal on 31 October. It also warned that food banks – already overstretched by record demand – would lose funding.
A separate government document leaked to Sky News revealed an assessment that a no-deal Brexit risks “consumer panic”, food shortages and an increased security threat within a fortnight.
The slide, prepared for ministers and obtained by Sky News, says the pound risks plunging further than it already has while Northern Ireland faces disorder.
Marked “official sensitive” and titled “What this could look like on the ground”, it also warns that UK ex-pats in the European Union risk losing access to services and residence rights within the first 24 hours if the UK leaves the EU with no deal and no UK government guarantees for the right of EU citizens in the UK.