Wales: Cost of Living

Baroness Andrews Excerpts

Monday 2nd December 2013 Lords Chamber

[Baroness Andrews (Lab)]

My Lords, I join other noble Lords in thanking my noble friend for securing this debate, and for the way in which she introduced it. All noble Lords in the Chamber would surely agree that this is not a situation where we need to indulge in party politics. The situation in Wales is extremely serious.

I must declare my interest. I am a consultant to the Welsh Government in developing a cultural heritage strategy for Wales which will, I hope, address the problems of poverty and disadvantage to greater effect in Wales. My greater interest is that I grew up in Wales at a time when it was celebrated as being among the most successful and spirited communities in the country. The same places are now notorious for levels of disadvantage. The toxic concentration of long-term unemployment, underemployment, low skills, low wages, chronic sickness and low educational achievement has not only reduced living standards but reflects living standards in Wales. The Government of Wales are absolutely right to say that poverty in Wales is everybody’s business, which is why every government department in Wales has to make a contribution—and that includes culture.

There is no question that the structural problems of Wales started with the deficit. My noble friend made no allusion to that at all. The structural problems of Wales, not least, were grossly intensified by Thatcherism, which created a long shadow across Wales to this day. Now we have a third generation who do not know what it means to go to work; we have an entrenched low-skills and low-pay culture and there is no room at all, anywhere, for complacency in Wales. These people have to contend with recession and welfare changes, which, as my noble friend said, are hitting Wales harder than many other parts of the country.

We are told that the recession is over. I was in Tredegar a month ago; I was in Townhill in Swansea some weeks ago; I was in Anglesey recently and I have been in Rhyl. The recession is not over in Wales and there is no sign of an end to it. Indeed, Wales has become a social laboratory, rather as London was at the end of the 19th century, where surveys and investigators come to look at the impact of poverty. The figures are horribly familiar: 26.5% are economically inactive, higher than the rest of Britain by 3.5 percentage points. Disability rights, as my noble friend has said, have hit disabled people in Wales hardest of all. With the transition from IB to ESA, the loss by 2014-15 will be £165 per year per working family. The impact on children has been very well described; it is inevitable and it is increasing. Only parts of London are worse.

For those in work, the figure that astounds me is not so much that 23% of employees are earning less than a living wage, but that only 3% are earning more than a living wage. We have already discussed how Wales, with the highest energy bills, has seen the sharpest increase in the number of people falling behind with their energy bills: 85,000 households. Then there is the bedroom tax. I cannot be the only person in your Lordships’ House for whom there is an echo of the means tests of the 1930s, when the inspectors looked at the quality of furniture in people’s homes to assess when they were actually eligible for unemployment benefit. That was when the piano went out, for example.

Community Housing Cymru has said that 78 per cent of its members have seen an increase in rent arrears. It expects bedroom tax arrears to double to more than £2 million by April next year. That is enough to service £40 million worth of debt, which could be used to deliver 400 new affordable homes. Does the Minister agree with me that that money could be much better spent?

There are certainly many brilliant housing associations in Wales, including RCT homes, which I visited last week. They are not only providing affordable housing: they are training adults and young people in very difficult circumstances to acquire very basic skills, because about 40% of adults living in Community First areas, for example, are without basic skills. Their record of getting people into work is three times the predicted employment outcome. Will the Minister promise to visit RCT homes and see how money is being well spent on those sorts of challenging situations? Community First is obviously part of the most challenging problem we have in Wales in terms of the areas it covers.

Part of the task is to enable young people and adults to acquire confidence and skills. Digital exclusion means not just not finding jobs; it means not being able to access legitimate benefits. Libraries are being reinvented across Wales as places where people acquire these basic skills alongside, sometimes, basic services. Will the Minister tell the House how many libraries in Wales are threatened with closure because local authority budgets are reduced? Will she say what she thinks the Government should do about this?

Above all, Wales urgently needs an economic policy that lifts living standards by anticipating the future. It needs ambitious leadership; a new approach to use public sector procurement for creative social enterprises; a national investment strategy to identify the creative industries of the future and the skills they need; a community regeneration strategy; and a national strategy for voluntary skills development and apprenticeships. These are the strategies than can lift Wales out of poverty for the next generation.