MAGGIE PAGANO: Government’s double dereliction of duty

You know something is seriously up when a pint of milk costs what most shoppers would expect to pay for a cup of coffee.

Over the last few weeks, milk prices have gone mad, up 20p a pint in a month.

Sainsbury’s takes the biscuit for the highest recorded price ever when the retailer charged £1 for a pint earlier this week.

That was the top end of prices, but even so shoppers are paying double the price for a pint of milk compared to a year ago. In August last year, a pint of semi-skimmed cost 41p. Today that is 85p.

Milk, along with other dairy products, has seen some of the biggest price rises as the cost of living has soared over the last few months. 

And it is set to continue increasing, despite the latest news that grain shipments are finally moving out of Ukraine’s seaports and many earlier supply chain disruptions are sorting themselves out.

According to the Government’s latest agricultural price index, the input costs for farmers are at an all-time high, up 33 per cent in the year to June.

Fertilisers remain the main culprit. Prices reached record levels after Russia’s invasion of Ukraine stopped grain and fertiliser shipments. 

Sanctions against Russia and Belarus – the world’s biggest producers – meant supplies had to be sourced from elsewhere. 

Until recently, many farmers have been absorbing these costs themselves, but they have now reached such levels that they are having to pass on costs to their customers. 

Some report that they may even stop rearing cattle or growing crops because they are close to bankruptcy.

Now there is a new fear – the closure of the UK’s last fertiliser plant at Billingham, near Middlesbrough, owned by the US group CF Fertilisers. 

CF says it is halting production of ammonia, a key ingredient of fertiliser, because of soaring gas costs. One of the by-products is carbon dioxide, used in the slaughter of pigs and chickens as well as food packaging and fizzy drinks. 

Closing the plant would have a ripple effect, possibly causing farms to cull their livestock because they don’t have enough feed, but also pushing up the price of basic foods even higher.

Brewers and meat producers are already warning the proposed shutdown will threaten their suppliers.

The Government stepped in two years ago to help when CF also stopped production because of costs. Now it says it is looking at all options. 

This is a pathetic excuse. But whether CF is playing games or not, the Government must take over the plant or subsidise production until we recover from this energy crisis – and do it immediately.

Governments only have three important responsibilities to their citizens – defending the realm, making sure there is enough food to feed the nation and that there is energy – at the fair price – so that the population does not freeze. So far, it is failing spectacularly on providing the last two.

Pascal’s wager

Britain’s biggest company, AstraZeneca (AZ), gets bigger and bigger.

The pharma giant’s shares hit a record of 11,540p yesterday – before closing at 11,422p – after Japan green-lit its drugs for treating myasthenia gravis and lung cancer.

AZ’s shares may also have been given an extra jolt this week after its talkative boss, Pascal Soriot, hinted in an interview that he is looking at doing more mergers and acquisitions, and is specifically interested in new oncology and cardiovascular treatments. 

It is no surprise considering the stick Soriot got from France and the EU, but AZ is also considering exiting vaccines. 

Even though the AZ-Oxford vaccine was one of the first developed against Covid-19, production delays and fears of side-effects meant it rather fell by the wayside, losing out to the mRNA vaccines Pfizer and Moderna. 

It is unlikely that criticism would affect Soriot’s judgement. It is more likely he sees more value in diving deeper into speciality medicines and oncology. Under his watch, shares have quadrupled, so he must be doing something right.

Hands off

Question for you. Who is the energy minister? And what do you think his responsibilities are? And, in the biggest energy crisis in peacetime, why don’t most of us know who he is?

In case you didn’t know, it is the invisible Greg Hands. Top of the list of his responsibilities in his job description on the Government website is Net Zero Strategy, not energy security. 

Then comes carbon budgets, low carbon generation etc. In sixth place is security of supply. Says it all.