Cost of Living

Baroness Ritchie of Downpatrick Excerpts

Tuesday 14th May 2013 Commons Chamber

[Ms Margaret Ritchie (South Down) (SDLP)]

At the heart of this debate are two fundamental questions: what is the economy delivering for people and why does it seem to be delivering more for some than for others? A functioning economy needs to work not just for those at the top but for all those who contribute to our businesses, industries and public services. We should all be concerned by the income gap and the disparity between those at the bottom and those at the top, and we have a responsibility towards those who put in so much but currently get little of the reward. Since the 1970s, wages have grown twice as fast for the top 10% as for those earning medium incomes.

Such inequality is not just an abstract economic problem; it fosters division and can be linked to several serious social problems. This should elicit not some glib response about the politics of envy, but a realisation of interdependence in our economy. The Government’s proposed consumer rights Bill is to be welcomed, and I await the details with interest, but there is little in this sparse legislative agenda to tackle the fundamental economic problems we are facing. What message is being sent out when remuneration is clearly no longer tethered to economic worth and input, and what message are the Government sending out when they cut the top rate of tax while introducing a 1% cap on benefits that will hurt children and families?

Currently people are having to work longer hours, pay more at the pump, pay more for their weekly shopping and struggle to budget for the increased cost of keeping the heating on. Every day can become a struggle. We have an economy with high inflation and record fuel, food and energy prices, combined with high unemployment and wage stagnation. That is the real pain that people are feeling in Northern Ireland. Growth has been non-existent under the coalition Government, which again is not an abstract consideration, but is being felt by people on a daily basis. A recent poll by the Consumer Council for Northern Ireland found that nearly 50% of people were extremely concerned about their ability to make ends meet and that people in their 30s and 40s were most concerned that they might lose their job, while those in their 20s were concerned that they could not find one. This paints a picture of a population that has lost faith in the economy and no longer believes that it will meet their aspirations.

Many Members have today discussed the pressing problems of rising fuel, food and heating costs, and this is especially the case in Northern Ireland where we have experienced the highest fuel prices in the UK and Ireland every month in 2013. The latest AA report for April 2013 indicates that Northern Ireland is the second most expensive place to buy diesel in the EU. The cost of filling up an average saloon car with a 50 litre engine is now £75, and 90% of customers report that they are spending more than they did two years ago, despite consciously trying to use their cars less.

It is a similar with energy costs. The cost of gas has risen by 38% and the cost of heating oil by over 68% since 2009, meaning that consumers face annual bills that are over £600 more expensive than five years ago. Many of those people are also facing deepening levels of fuel poverty. In the supermarket, consumers are faced with a £20 rise in their weekly food shop. These factors—filling a car to drive to work, paying energy bills and feeding a family for a week—are all compounded, leaving people constantly feeling under pressure.

I see very little evidence from the Queen’s Speech that the Government grasp the fundamental challenges that they face to restore growth and confidence to the economy. The Government should be creating investment, not insecurity. There needs to be an economy to which everyone feels connected, one that is grounded in a degree of fairness.

More specifically and more immediately, I support measures such as the sectorally targeted VAT reduction on tourism and hospitality products, which has been successful in other European countries. I also call on the Government to deliver on the peace dividend that was promised for Northern Ireland back in 2007 in order to pump-prime devolutionary measures, as well as to ensure that our standard of living and rising unemployment no longer create those social divisions that have been relevant for some time. In that regard, I urge Cabinet Ministers to sit down with the Northern Ireland Executive to put a proper long-term economic deal in place.