Boris and friends: pushing up food prices
Guest post by Nick Newsom from the World Development Movement
Given that 31% of Londoners say that the cost of living in London should be an important focus for the Mayor, we ought to look at how the party affiliations and political allegiances of our leaders really affect pressure on household budgets.
Consumers were dealt a blow recently with the news that UK inflation reached 3.5% in March, putting an end to the downward trend that we had seen since September last year. Additionally, as UK food price inflation rose to 5.4% the same month, it is clear that above-inflation increases in the price of food are making the ‘weekly shop’ an ever more burdensome occasion.
So, what is Boris doing to help us combat high food prices? Well, not very much. In fact, over the past four years he has been doing his best to represent the interests of the very organisations whose actions are contributing to the food price crisis by speculating on food prices, as the World Development Movement (WDM) has highlighted.
The cosiness of City with the Conservative Party is a trait that undoubtedly extends to Johnson’s incumbent office. Indeed, his 2008 mayoral campaign was more than half funded by donations from the financial sector and hedge funds. This time around, it has been revealed that Boris’s campaign director was in the pay of Michael Hintze, the ex-head of equity trading at top food speculator Goldman Sachs and Tory donor, famously linked to former defence secretary Liam Fox and Adam Werrity.
Those who have experienced the joy of reading through the Mayor’s self-congratulatory reports to the Assembly - right to the end - might have noted the frequency of his key engagements with senior-ranking members of financial institutions and those involved with commodity trading.
Take, for instance, his meeting last year with Duncan Niederauer, CEO of the NYSE Euronext, “to highlight London’s role as an international financial centre”. Not only is Niederauer another former Goldman employee of 22 years, having held the position of Managing Director, but NYSE Euronext has been profiting from financial speculation on food prices – with their website even boasting that they are able to “offer exposure to the price volatility of the underlying commodity but without the delivery risk of physically delivered contracts”.
This encourages precisely the sort of trading that has been pushing up commodity prices and exacerbating volatility.
Then in September, Boris met with the British Banker’s Association, another lobby group that has been working hard to water down financial reform legislation. And it’s not just Boris himself – FOI requests by WDM show that his team at the GLA have also been busy getting schmoozed by the financial sector, with at least 25 meetings being held between GLA officials and City lobbyists since the start of 2011, including 9 with Barclays and 7 by lobby group The City UK.
If any further confirmation is needed on the Mayor’s attitude towards regulation, we only need look back to September 2009 when, in the wake of the financial crisis, Boris visited Brussels to lobby on behalf of the City against the proposed “hedge fund directive”. Four months later, in a letter to Lloyd Blankfein, CEO of Goldman Sachs, Boris reaffirmed that he would:
David Cameron may be feeling proud that he can tell us the price of a pint of milk, but for those of us who aren’t privy to the conversations between Boris’s clique of posh boys and the financial elite who increasingly have a stranglehold over everything, including our food system, action must be taken now to place brokers under public scrutiny and ensure that they are accountable for their actions.
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