Families: Cost of Living

Baroness Dean of Thornton-le-Fylde Excerpts

Thursday 31st October 2013 Lords Chamber

[Baroness Dean of Thornton-le-Fylde (Lab)]

My Lords, I thank my noble friend Lady Prosser for arranging this debate today and for the detail that she went into in her presentation. A recent YouGov poll reported that one-half of the working population believe that the coalition’s economic policies are making them feel less secure. That is not a revelation; I think that most of us would understand that from going around and reading the press. A Which? report this month says that consumers have less money to spend than they did a year ago; that more than one in four have cut back on essential spending; that women between 30 and 49, and those earning least, have been hardest hit by the austerity measures; and that basics such as the cost of fuel, energy and food were the biggest worry that households had—the three key factors that help keep a household together. One in five households had no savings at all to give them a barrier against these challenges. The Joseph Rowntree Foundation found that families with children were feeling particularly squeezed.

One of the areas they are squeezed on is related to the debate we had earlier on welfare cutbacks. If we look at the way the Government have applied housing policy—I do not expect the Minister to answer on this as it is not his portfolio—and consider underoccupancy, the Government have introduced the discretionary housing payment. That sounds good. The problem is that 200 local authorities are applying it in different ways. In one authority, you may get support for 12 months; in another, you may get it for three months. It is a postcode lottery. That is helping make people feel insecure.

Provident Financial, which is, I gather, the largest loan company in the country and is based in Leeds, said that rising food, fuel and utility bills are now the biggest reasons for people taking loans. It has 1.7 million customers, and debt levels are rising, which should concern us all. People are resorting to food banks. In April this year, we heard reports that the number doing so had trebled since last year. Last year, 113,000 people were relying on them; this year, there are 356,000 people, of whom 120,000 are children. I read in a newspaper—I cannot remember which—that one response was, “There are more food banks, so of course more people are using them”. What an arrogant, unthoughtful statement to make.

Reports indicate that we have growth, which is good news. I hope it will pick up momentum. Even so, the economy is still 2.5% smaller than it was before the recession, manufacturing is 8.9% lower and construction is even lower. Last Friday, the Daily Mail—yes, the Daily Mail—reported that workers expect a fifth successive year of below-inflation pay rises, and many have had no pay rise for four years. Working families are reading that and are reading about, for instance, the chief executive of Serco who is going because he has failed, but going with £9 million in his back pocket. He will not have any problems. They are reading about the enormous increase in dividends. Of course, I accept that savers need dividends, but it is almost telling people that we live in two different worlds running in parallel: the world of the working poor, where two in a family working cannot bring in enough income to look after the family, and the other world of people who are exceptionally and enormously well paid. The subterranean world of working families did not create the problems this country has, yet they are taking the brunt of the austerity measures.

The recent report from the Government’s Social Mobility and Child Poverty Commission, chaired by Alan Milburn, a former Labour Minister, reported that the working poor are bearing the brunt of the coalition’s deficit reduction. That is quite a statement and quite an indictment, too. What is the Government’s answer? It is not good enough to say, “We have this debt problem”. There is no need to repeat that mantra that it is the Labour Government’s fault. That does not wash any more. It cannot wash; it never did. What is the Government’s intention? One thing that would help would be for the Government to adopt the living wage. That would give some hope because it is quite clear that the minimum wage is now not meeting what families need to live independently. We do not want working people to be dependent on welfare benefits, and they do not want that, either. A living wage would certainly help.

This is an issue that we need to address. I congratulate my noble friend on achieving this debate.