From November 2021 to November 2022, food prices increased by 12.7 per cent, according to Statistics Norway.
On Wednesday 1 February, grocery suppliers will adjust their prices for the first time in 2023. Food may be up to 10 per cent more expensive. Many are excited about how the price increase will be this time.
The state earns billions from rising prices, and several top economists are advocating that VAT on food should be reduced or removed completely.
The confederation leader of the LO confederation Handel og Kontor, Christopher Beckham, proposes a six-month VAT exemption on food in the first instance, to make food cheaper for people.
– It is time to look at the VAT on food. We want to remove the food allowance for a period of time, because we want to maintain the jobs. We want people to get healthy food on the table, and we want to maintain people’s purchasing power.
Measures for most people
He is not afraid of the warnings about inflation and higher interest rates due to cuts in VAT on food.
– This will be a universal arrangement, this will be good for us to be able to keep the wheels turning in Norwegian business.
– Is it accurate?
– These are measures for part-time employees and average families who find it difficult when prices go up. We are proposing a temporary arrangement, and then the government will have to figure out how to save.
Beckham hopes that consumers and working people can get support in the form of seeing that you save 15 per cent on the till.
The Socialist Left Party supports Handel og Kontor’s proposal for an exemption for six months, and had this in its alternative state budget.
– We have proposed this to test whether it benefits consumers or purchasing power. There is reason for optimism that all or large parts of the cut in VAT would benefit consumers, says deputy chairman Torgeir Knag Fylkesnes during the political quarter on NRK on Tuesday morning.
SUPPORTERS: Torgeir Knag Fylkesnes. deputy head SV Photo: Ditlev Eidsmo / TV 2
He admits that there is reason to be concerned that purchasing power will benefit.
– But VAT is something we should consider. What is happening now is completely insane, and purchasing power is being pushed down sharply. Some make a lot of money from it, says Fylkesnes.
The two players also receive support from chief economist Jan Ludvig Andreassen in the Eika group.
– The simplest is the best: remove VAT on all food. We can afford that, he has previously told TV2.no.
He envisions that the public sector itself can benefit from it, such as reduced procurement costs for food in all public enterprises such as schools and hospitals, reduced pressure for support for, for example, agriculture, hotels and restaurants, and perhaps also reduced salary and social security requirements.
Cold shoulder from Støre
Confederation leader Christopher Beckham hopes that SV will join forces with Ap and Sp to get such a proposal through. But he gets a cold shoulder from Prime Minister Jonas Gahr Støre.
He does not agree that VAT cuts are a good proposal to solve the price increase.
– I don’t think that is a good solution, and no lasting solution to such a problem. Here we have to go to the core, a competition that works in the grocery market, put the effort in there.
DISAGREE: Prime Minister Jonas Gahr Støre visited Melkøya in Hammerfest on Tuesday. He disagrees with the proposal for Handel og Kontor and SV. Photo: Tom Rune Orset / TV 2
Prime Minister Støre is concerned that the price increase will affect people’s finances.
– It worries me, because many people can have a tight budget.
He says that the government is keeping a close eye on the competition between the grocery chains, and that this is working.
– The stores and chains must be aware of their responsibility. There is no reason to have an increase that is announced in advance. We have to keep a close eye on this, and make sure that the competition works and that it does not become a system where prices rise and affect people in an unreasonable way.
