The British supermarket chain Morrisons recently announced that it will only sell free range eggs. This is a telltale example of how business and government are starting to do more to encourage or require ethical consumption in the UK.
The government recently announced that solid coal and wet wood can no longer be used in domestic burners and fireplaces. And the Chancellor of the Exchequer is reported to be considering an increase in fuel duty in the budget, in line with carbon reduction objectives.
All these things have the potential to increase basic living costs, including for worse-off households who are already struggling to make ends meet. Poorer working-age households have seen their buying power squeezed in recent years. For example, my team’s research on minimum household living costs in the UK shows that these typically rose by 8%-12% from 2015 to 2019 (varying by household type). This is the same period over which benefits and tax credits were frozen in cash terms.
Growing use of food banks reflects the vulnerability of households living on the edge when there is nothing to fall back on if things go wrong. For such families, increasing the cost of the basics even by what may seem like small amounts can cause additional hardship.
In the coming years, there will be growing pressures to increase the cost of basic food and fuels in response to a range of environmental and ethical concerns. From reducing energy use through pricing, and switching to less polluting modes of consumption, to responding to ethical concerns around issues such as animal welfare, environmentally responsible farming and fair trade.
Where this involves regulation or supply changes like Morrisons’s decision on eggs, rather than free choices by consumers about buying ethically, worse-off households will be vulnerable to further increases in living costs. Food and energy form a disproportionately high proportion of overall spending for the worst-off.
This has the potential to create tensions between the interests of needy groups and a range of ethical concerns. But this does not need to be a straight trade-off if policies can be designed to take both aspects into account. To understand some of the complexities, consider the case of meat.
Most people in rich countries eat far more red meat than they need to or is good for the planet. But when we asked members of the public if they would view, for example, eating less meat as compatible with an acceptable living standard, they were resistant. This is partly because some meat, such as chicken and beef, has become relatively cheaper in recent years and so a more economical way of feeding the family.
Our research showed that people are heavily influenced by price. They were most committed to doing things to “save the planet” when this also saved their wallets, such as reducing their energy use after gas and electricity prices rose.
Over the past 15 years, British lamb prices have risen much faster than other meats, and lamb consumption has fallen. This shows that over the long term, eating patterns can gradually change, influenced by price. This makes our relatively recent shift to a more meat-based diet reversible – a change that would also help improve living standards by making people more healthy.
But this doesn’t address the immediate issue of how to avoid creating extra hardship by raising the price of goods in the interests of ethical consumption. In doing so, it is helpful to think about the meaning of terms like “food poverty” or “fuel poverty”. To what extent is difficulty affording such items driven, on the one hand, by low income, or on the other by high costs?
The official definition of fuel poverty was changed in 2012 to cover only cases where households have both relatively low income and relatively high fuel requirements. In these cases, an important part of the solution is to get a household’s fuel costs down, for example through subsidies to improve the energy-efficiency of people’s homes targeted at those in fuel poverty.
Maintaining living standards
In cases where the affordability issue is simply down to having very low income, solutions should be to help improve people’s earnings and public benefits. Looked at another way, if the only way people are able to afford to eat is by selling them ultra-cheap food produced in unsustainable ways, the solution is not to lower standards but to raise incomes.
Yet given that there will continue to be people finding it hard to make ends meet, those introducing ethically-driven changes affecting the price of basics need to think actively about what can be done to mitigate the impact.
One option is to consider how when one product is withdrawn or made more expensive through taxes or regulation, affordable substitutes can be made available.
Following the recent banning of solid coal and wet wood for stoves, on which some households rely for heat, it will be important for government to ensure that alternatives, such as kiln-dried wood, are both available and sold at reasonable prices, even if this may initially involve a degree of subsidy or regulation. Similarly, were regulations on caged hens to be tightened, governments may consider whether additional subsidies could help to limit the impact this has on price.
The media and public have grown wary of excessive intervention in free markets, but could come to accept that more interventions are needed to make ambitious commitments on emissions reduction a reality. In such a future, it is crucial that those who intervene to set ethical and environmental standards are also more active in ensuring that this does not increase hardship for the most needy households.