As the Iran war smashes through its second week, I take a trip to Tesco Town. This is the retail nickname for what is thought to be the capital’s biggest supermarket, Tesco Extra in Woolwich, south London. A 17-storey monolith of glass and steel, home to a gym and 259 homes – as well as the Biggest of Big Tescos – it was over two decades ago awarded architecture’s “Carbuncle Cup” for the ugliest building in Britain.
When I visit, though, it’s “magic hour”. This is the time of day when staff begin attaching yellow discount stickers to perishable products lining the shelves. Late-afternoon sun shimmers off the windows, as shoppers push their trolleys with renewed zeal.
A flat-capped elderly man scoops up some green seedless grapes, reduced from £2 to £1.26. A gym bro in a black hoodie and leggings with a heroic basket of corn-on-the-cob and some sanitary pads picks up three packs of oyster mushroom clusters, reduced from £2.15 to £1.51. People hover around other bargains: caramelised red onion sausages, plaice fillets, cold-water prawns.
Over and over, shoppers of all ages and occupations tell me food, fuel and other bills are rising, and their wages aren’t keeping up. They all mention Iran. “You have no disposable income after food, rent, utilities, and the salary’s not going up,” says a 57-year-old charity worker, who could no longer afford her usual loaf of own-brand rye bread after it rose from £1.40 to £2. “The war in the Middle East means everything will shoot up in price.”
“Prices are skyrocketing – especially tea, coffee, bread and milk,” says a 33-year-old council worker who has stocked up on discount oven pizzas, piled into the bottom of her baby’s pram. “Can you believe I’ve just spent £3 on a pineapple?” She is also concerned about the war driving up prices further, and the prospect of more people fleeing conflict. “We’re a welcoming country, but I don’t think we have room for more refugees, after the Afghans and Ukrainians, while also looking after ourselves.” Petrol was already costing a 20-year-old tourism management student more.
Pollsters and focus-group folk recount that the struggle to afford the basics has been a widespread concern since inflation’s 2022 high. The cost of living is the first priority by far for the British public, well beyond other issues, including the NHS and immigration. Now, with the war in Iran having pushed up oil prices to a peak of $120 a barrel at the time of writing, that worry is intensifying. Petrol and heating oil is already more expensive, mortgage lenders are reversing plans for cheaper loans, and there are predictions of an interest rate rise, rather than another cut.
Keir Starmer has acknowledged the potential for an “impact into the lives and households of everybody and every business”. Rachel Reeves has warned of prices already rising – and hinted at plans to help households that rely on heating oil and to cap fuel prices, as well as reassuring the public that their energy bills will still come down in April as planned.
Not only has this crisis hit at precisely the point that the Chancellor finally had some good news to deliver about the economy, but also at a strategic turning point for Labour. Soft-left voices among MPs and strategists are now more influential, given recent staff departures from No 10 (such as the harder-edged Morgan McSweeney) and the Green Party’s by-election win in one of Labour’s safest seats. They have been urging the government for some time to appeal more directly to progressive voters, and also to pursue a “cost-of-living populism” – ie, talk less about cultural issues that divide people and more about the literal bread and butter.
This is a trickier message when global events show you don’t have much control over the answer to the Reagan Question: will people feel better off by the time of the next election? If they don’t, it will be the government that’s blamed – Reeves, after all, has blamed the Conservatives for inflation and interest-rate highs during the last parliament, despite these being largely out of the Tories’ control. I suppose it’s only fair: the Conservatives have always blamed Labour for the wage-price spiral amid the Seventies oil shock.
What Labour could learn from the Tories, however, is not to let a crisis go to waste. The memory of partygate means most of us forget that for years, Boris Johnson, when prime minister, was actually given significant leeway by the public by constantly repeating how global events – the pandemic, Russia’s invasion of Ukraine – justified his government changing course. For example, in 2021 he broke his election pledge not to raise the main taxes with a so-called health and social care levy, which added 1.25p in the pound to National Insurance. “It breaks a manifesto commitment, and I do not do that lightly – but a global pandemic was in no one’s manifesto,” he said at the time.
Labour has had every opportunity to make its equivalent “excuses”: Donald Trump’s tariffs, Red Sea shipping disruption, Russia-Ukraine’s near stalemate, and now the Iran war. A skilled communicator could have picked any one of these events as a rationale for looking sombre in front of a Union Jack and explaining the need to, say, break the promise not to raise income tax.
With their bags full of bargains, the shoppers I meet are all too aware of the reality for their finances of a global shock. They only wish their government was better prepared to absorb it.
[Further reading: Oil prices mean Starmer must raise tax or face recession]
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