Six weeks ago I accepted a role as the government’s cost of living champion because I wanted to make a difference. And to do so fast. To be a player on the pitch, not a commentator taking cheap shots from the sidelines. I wanted to do this because I know from first-hand experience just how hard it is for many families to meet their everyday living costs. I see that pressure at the tills of my family’s Iceland shops, where we serve five million customers a week.
I also accepted the role because it came with a direct line to the prime minister, ensuring that while I am independent and have no levers of power, I do have the best possible chance of my advice leading to real change. I am determined to be a constant nag.
I wasn’t expecting war in the Middle East and a global energy crisis when I agreed to take the job, and in February interest rate and inflation projections looked sure to provide the nation with a handy tailwind. I should have known because — let’s face it — we have been lurching from one crisis to another, whether that’s the global financial crash or Covid, for the past two decades.
What I am clear about is that this cannot be another moment when ordinary households take the first and hardest hit, and profiteers seize the opportunity for prices to ratchet up quickly and come down slowly.
The first duty of government in this as in every other crisis is to protect the public and do all it can to mitigate the impact on households. Families don’t need committees to meet and draft a report; they need rapid action they can see in their weekly budgets.
On energy, which is top of everyone’s mind right now, the government rightly points to interventions such as the warm homes discount, the fuel duty freeze until September (at least) and the energy price cap, which will provide protection until July. And it has acted swiftly to extend that relief to the most exposed group, users of domestic heating oil.
That gives us breathing room. Nevertheless, we hauled the petrol retailers and energy producers into Downing Street last week to give them a shot across the bows — a warning that opportunistic rip-offs will not be tolerated. The Competition and Markets Authority was there too, with its newly enhanced power to step in if required. The pressure on the regulators needs to be constant. If they do their job effectively, those sectors that have profited from price-gouging against the most vulnerable in society should consider themselves on notice.
Should we go even further? Any business reader of this newspaper will appreciate that the economics of a comprehensive, open-ended energy price cap, proposed last week by Zack Polanski, don’t stack up — and could lead to disastrous consequences, such as rationing. But I have asked the government to consider a temporary profit cap, if required, to stop producers and retailers exploiting the crisis to make windfall profits at the expense of consumers.
As executive chairman of a retailer, I have no problem with profit. It’s what allows businesses to invest, employ people and pay tax. But I do have a big problem with profiteering, especially when families are under real pressure.
The cost of living crisis isn’t just about energy. There are pressures on almost every front at once, and the response to date has been slow, disjointed and reactive. I’ve been looking at many areas, from childcare to transport.
I’ve said consistently that government needs to listen to business more. That’s why I had to accept the role, even knowing it would be tough and that “tsars” have traditionally had mixed results. I want to ensure fairness. To get government and regulators working together properly, focusing on practical outcomes for households.
I know that I will ultimately be judged on just one thing: whether I succeeded in easing the pressure families feel every day. By the time I’m done, I want them to feel not only a little better off but also that we have a government that understands their struggles and is doing everything it can to help.
Lord Walker of Broxton is executive chairman of Iceland and No 10’s cost of living champion