SNP food price cap could lead to 'rationing', says shadow chancellor

Mel Stride said artificially reducing the price of goods could diminish the incentive to produce them.

The Tory frontbencher said the SNP should instead focus on growing the economy rather than intervening in markets.

It comes after Mr Swinney said the price of between 20 and 50 essential items would be capped in large supermarkets if the SNP is re-elected on May 7.

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The policy was immediately met with scepticism from the industry and described by the UK government as “undeliverable”, with a potential legal battle with retailers on the horizon.

Speaking to journalists during a visit to a pub in Edinburgh, where he was celebrating the lifting of US whisky tariffs, Sir Mel said: "I think if you start intervening in markets like that what you tend to do is end up with some form of rationing, undersupply etcetera. I don't think that’s the way to go forward. 

“The way the SNP should be approaching things is making Scottish people better off so they can afford those kind of basics, and that means having an economy that is growing.

“And that means on balance getting taxes down, particularly on businesses, who are the engine of growth, and not spending lots of money on welfare.

“Actually getting more people off welfare into work, growing the economy, getting taxes down, that is how you get into a position where people can naturally afford those kind of items.”

He added: “If you try to artificially reduce the price of things then the incentive to produce them diminishes.

“What we should be doing is creating a stronger economy so that people can afford things they are currently struggling to afford.”

Sir Mel continued: “If you artificially reduce the price of something it is a basic economic fact you will get a lower supply of that item, that is the simple point I am making.

“The right way to address issues of people struggling to afford things is to create a wealthier, faster growing economy and the SNP I think have been lamentable in terms of their approach to tax, their approach to welfare, doing things that have not been good for the Scottish economy.”

His comments came as he also raised concerns about the SNP’s demands for a second independence referendum if the party succeeds in winning an overall majority at Holyrood on Thursday.

Sir Mel said this would have “a very negative impact”, creating “more uncertainty” for businesses and the economy.

The Tory insisted: “What the Scottish National Party should be doing is concentrating on the real challenges Scotland has.

“It should be concentrating not on putting taxes up but reducing them, it should be concentrating on standing behind our businesses, not on this business rate revaluation that is putting up the cost of business rates, particularly on retail, leisure and hospitality in Scotland.

“And it should be focusing on getting the welfare bill under control so we can get taxes down and the Scottish economy growing. I am afraid all this talk about independence, this obsession the SNP has with this, is a sideshow and a major distraction.”

Simita Kumar, SNP candidate for Edinburgh South Western, said: "People are really struggling with the cost of the weekly shop - so the SNP will take action and introduce a legal price cap on a range of essential food items in big supermarkets.

"We want to cut people's costs and the opposition parties are so determined to stop us that they are reduced to making up nonsensical claims like this.”