Income Equality and Sustainability

Baroness Penn Excerpts

Wednesday 6th May 2020 Lords Chamber

[The Archbishop of York]

My Lords, I am grateful to the Government Chief Whip and the usual channels for granting me this opportunity to move a Motion that is very dear to my heart—thank you. I commend Her Majesty’s Government for their rapid action in the current crisis and, through unprecedented public spending, working to protect jobs and avert millions of redundancies. It is in the light of this recent health emergency that I beseech your Lordships’ House to take note of the case for increasing income equality and sustainability.

Last Thursday, the noble Baroness, Lady Bennett of Manor Castle, opened a Question for Short Debate on Covid-19 and people living in poverty. I believe that what we are doing today has the potential to make a lasting difference. As Amelia Earhart, the first woman to fly across the Atlantic, said:

“The most difficult thing is the decision to act, the rest is merely tenacity.”


As long ago as 28 April 1909, Winston Churchill, then president of the Board of Trade, gave a speech in the other place in which he said:

“It is a serious national evil that any class of His Majesty’s subjects should receive less than a living wage in return for their utmost exertions.”—[Official Report, Commons, 28/4/1909; col. 388]


Not much has changed since. That principle remains as strong as ever in our national life.

Ten years later in 1919, after a world war and a global flu pandemic, the International Labour Organization constitution affirmed:

“Peace and harmony in the world requires an adequate living wage.”


The economic argument that workers should be paid a fair and living wage was not new even then. In 1776, Adam Smith, said to be the father of modern market economics, wrote:

“Servants, labourers and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.”


Many jobs fall far short of this ideal for millions of workers across the United Kingdom. The truth we now see is that the vast majority of front-line key workers are hard-pressed on poverty wages.

Kate Pickett’s and Richard Wilkinson’s ground-breaking book The Spirit Level showed that a wide range of social problems are more common in societies with larger income differences between the rich and the poor. The solution must be to narrow the gap between wages and basic living costs. The creation of an economic equality and sustainability commission would help to facilitate the creation of more income equality and a fairer society that would solve many of the pressing social problems such as the supply of genuinely affordable homes and social care provision. David Cameron, before he was Prime Minister, acknowledged:

“We all know, in our heart, that as long as there is deep poverty living systematically side by side with great riches, we all remain the poorer for it.”


When I was Bishop of Stepney, I soon became aware that low-paid workers there were having to work two or three minimum wage jobs but still struggled to make ends meet. At that time, the Living Wage Foundation, started in Bethnal Green in 1997, called on businesses to recognise the important role of their “invisible” workers and pay them a real living wage.

A recent Living Wage Foundation publication from 3 March 2020 quotes two case studies of year 6 pupils. The first says:

“Mum works extremely long hours to make ends meet—often do not see parents for long periods. Choice between paying bills and paying for food.”


The second says:

“Mum works as a Care Worker and is paid £8.21 an hour. Have to do the dishes and keep things tidy at home—I have my chores to do. Mum is not supposed to work weekends but works Saturday and Sunday—comes home, has dinner, watches TV and goes to sleep. I am lonely. This”—


a living wage—

“would make a difference to my family.”

I am very proud to support the proposals from the Living Wage Commission, which I chaired, for the real living wage, calculated according to the cost of living, providing an hourly rate of pay that is independently calculated each year. Rates for 2019-20 are £9.30 across the UK and £10.75 in London. This living wage applies to all directly employed staff over the age of 18, regardless of the number of hours they work. We need to distinguish between Her Majesty’s Government’s national living wage—a higher minimum wage rate for over-25s—and what I referred to as the real living wage, through which families do not go short.

If we support the principle that those who are least well-off should get the most help, it is shocking that children living in poverty have not been the number one priority in the unprecedented package of support announced by the Chancellor. The coronavirus national emergency is already exposing the inadequacy of the safety net provided by our social security system, as more people who have not previously relied on benefits get to experience how mean it really is. Hopefully, this will lead to a more generous and compassionate system. So, why not increase the national living wage to £10 per hour for everyone now? The time has come for us all to stop talking about welfare benefits and talk instead about social insurance, a term which underlines both that our focus should be on need, and that we are all in this together.

The biblical vision is not of a world in which individualism and consumerism are the purposes for which we are made, but one in which we are created for fellowship and mutual responsibility. It is of a world in which the principal aim of policy is to enhance the well-being—that is, the personal and communal flourishing—of all in society. The challenge is to articulate a vision of that eudaimonia; not a word much used in Yorkshire or in your Lordships’ House, but a useful Greek word to describe the well-being and flourishing of a community and all those within it.

Dame Julia Unwin, in her chapter in the book I edited, On Rock or Sand? Firm Foundations for Britain’s Future, analysed the changing face of poverty in this country, including the rising gap between the rich and the poor. She also highlighted the new and deeply worrying fact that for the first time, the historic link between poverty and unemployment has now been broken. She writes:

“The notion that hard work will enable people to leave poverty and build a life of self-reliance has been broken. Instead the prospects of work provide intermittent activity, limited reward and no security.”


After the current crisis, the major concern of our age is sustainability. It is becoming ever clearer that income equality is a precondition for moving to environmental sustainability. It now seems inevitable that people all over the world will suffer endless environmental crises and hazards, leading to displacement and food shortages. As well as a need for better systems for emergency aid, much will depend on a strong ethos of mutual support between neighbours as well as between countries. That is fostered by greater equality, as Richard Wilkinson and Kate Pickett have shown in both The Spirit Level and more recently in The Inner Level. Greater equality is the basis for stronger community life and indeed a greater capacity to be united in a response to the climate emergency.

It is therefore crucially important to reduce income differences both before and after tax. We need to make income tax highly progressive again and to have higher taxes. To reduce inequalities before tax, all employers should, as a minimum, pay the real living wage. In English cities where Labour-controlled local authorities have set up fairness commissions, they have almost always become living wage employers. They have successfully communicated their real living wage commitment to everyone they do business with and have encouraged them to consider implementing the real living wage for the real cost of living.

The current crisis has made all of us aware of the need to recognise the value of our key workers. Please listen to the words of Linda, a carer:

“Since I started being paid the living wage I haven’t had to worry about if I can pay the bills and more importantly than that, I get to spend time every day with my mum and daughter and I’m not falling asleep on the sofa as soon as I get in. I eat better, I sleep better and I’m much less stressed”.


That is from a page in the Living Wage Foundation’s guide.

The Scottish Government and Wirral Council recently took bold steps to support care workers, committing to uplift them to the real living wage—including ancillary workers such as cleaners and catering staff. Some of the local employers have been paying their workers a real living wage since long before the crisis, recognising that higher pay benefits not only workers but businesses, through lower staff turnover and lower absenteeism. Care work is a huge industry with around 1 million workers supporting some of the most vulnerable people in society, often for incredibly low pay. For too long, its importance has been undervalued and underfunded but now there is a real opportunity to create lasting change in the sector.

As we emerge from this crisis, we must look again at how we value this work and pay for it. It is time to rethink how government, public bodies and businesses work together in order to bounce back better and ensure that there is adequate funding, so that all care work is rewarded with, at least, a real living wage. Then, we must deliver fair pay rises for our key workers and rewards for workers across the economy, to restore what they have lost through 10 years of cuts and slow growth. Let us make paying the real living wage the litmus test for a fair recovery. Let us help our country become a place where the wellsprings of solidarity—of a new, undivided society—can begin to spring up, and then go beyond the real living wage. Income inequality is the great giant of our time, which we must slay. The real living wage is a crucial tool in our armoury, but the living wage is a first and vital step in challenging inequality.

Let me end by sharing with your Lordships the four guiding principles which have impelled me to work tirelessly to promote the real living wage. The first is that all human beings are of equal worth in the sight of God. There is no one and no group of whom we can say “They are less important” or “They don’t matter”. The needs of the other person are always as important as my own. The second is a commitment to offer everyone the opportunity to flourish. A society is well-ordered only in so far as it offers ways of flourishing to all its members. The third is a recognition of our human interrelatedness and interdependence. As the African proverb says, “When a tiny toe is hurting, the whole body stoops down to attend to that toe”. The reality is that we are all inextricably bound up with each other’s welfare. We rely on each other; if one suffers, sooner or later we will all suffer. Covid-19 and the lockdown have vividly demonstrated this for us all. The fourth is the need to accept our duty of responsibility by using our God-given potential both for ourselves and to serve others. I beg to move.

[Baroness Penn (Con)]

My Lords, I remind your Lordships that this is a time-limited debate. This means that contributions are limited to two minutes, to enable all speakers to contribute and the Minister to give the fullest possible response.