As the war in Iran enters its second week, I make a trip to Tesco Town. That’s 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 largest of the Big Tescos – more than two decades ago it was awarded architecture’s Carbuncle Cup for Britain’s ugliest building.
When I visit, though, it’s the “magic hour.” This is the time of day when the staff starts putting yellow discount stickers on the perishables that line the shelves. The late afternoon sun shines through the windows as shoppers push their carts with renewed zeal.
An elderly man in a flat cap picks 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 a couple of sanitary packs collects three packs of oyster mushroom clusters, reduced from £2.15 to £1.51. People move around other bargains: sausages with caramelized red onions, flounder fillets, cold water shrimp.
Time and time again, shoppers of all ages and occupations tell me that their food, fuel and other bills are going up and their wages are not keeping up. They all mention Iran. “You have no disposable income as food, rent, utilities and the pay is not going up,” says a 57-year-old charity worker who could no longer afford her usual loaf of her own brand rye bread after it rose from £1.40 to £2. “War in the Middle East means everything will go up in price.”
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“Prices are skyrocketing – especially tea, coffee, bread and milk,” says a 33-year-old council worker, who has stocked up on discount bakery pizzas piled in the bottom of her pram. “Can you believe I’ve just spent £3 on a pineapple?” She is also worried about the war driving up prices further and the prospect of more people fleeing the conflict. “We are a welcoming country, but I don’t think we have room for more refugees, after the Afghans and Ukrainians, while we also take care of ourselves.”
Pollsters and focus groups show that the struggle to afford the basics has been a widespread concern since inflation peaked in 2022. The cost of living is by far the number one priority for the British public, far ahead of other issues including the NHS and immigration. Now, with the war in Iran pushing oil prices to a peak of $120 a barrel at the time of writing, that concern is intensifying. Gasoline and heating oil are already more expensive, mortgage lenders are changing plans for cheaper loans and there are predictions of an interest rate hike, rather than another cut.
Keir Starmer has acknowledged the potential for an “impact on everyone’s lives and families and every business”. Rachel Reeves has warned of already rising prices – and hinted at plans to help families who rely on heating oil and cap fuel prices, as well as reassure the public that their energy bills will still go down in April as planned.
Not only has this crisis hit precisely at the point when 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 hard-edged Morgan McSweeney) and the Green Party’s by-election victory in one of Labour’s safest seats. They have for some time called on the government to appeal more directly to progressive voters, and also to pursue a “cost-of-living populism” – that is, to talk less about cultural issues that divide people and more about real bread and butter.
That’s a more complicated message when global events show you don’t have much control over the answer to Reagan’s question: Will people feel better by the time the next election comes around? If they don’t, it will be the government to blame – Reeves, after all, blamed the Tories for inflation and high interest rates during the last parliament, despite these being largely out of the Tories’ control. I suppose it’s only fair: the Tories have always blamed Labor for the wage price spiral in the middle of the seventies oil shock.
What Labor can learn from the Tories, however, is not to let a crisis go to waste. Party memory means most of us forget that for years Boris Johnson, when he was prime minister, was actually given great leeway by the public to repeatedly repeat how global events – the pandemic, the Russian invasion of Ukraine – justified his government’s change of course. For example, in 2021 he broke his election pledge not to raise key taxes with the so-called health and social care levy, which added 1.25p in the pound to National Insurance. “He breaks a manifesto commitment, and I don’t do that lightly – but a global pandemic was not in anyone’s manifesto,” he said at the time.
Labor has had every opportunity to make their equivalent “excuses”: Donald Trump’s tariffs, the disruption of Red Sea shipping, the near Russia-Ukraine standoff and now the Iran war. A skilled communicator could have chosen any of these events as an excuse to look grim in front of a Union Jack and explain the need for, say, breaking the promise not to raise income tax.
With their bags full of shopping, the shoppers I meet are acutely aware of the reality for their finances of a global upheaval. They just wish their government was better prepared to absorb it.
(Further reading: Oil prices mean Starmer must raise taxes or face recession)
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