Wales: Cost of Living

Lord Anderson of Swansea Excerpts

Monday 2nd December 2013 Lords Chamber

[Lord Anderson of Swansea (Lab)]

My Lords, I commend the initiative of my noble friend, in part because she focuses on the issues of real concern to the people of Wales and not to the elites. I cannot plausibly claim that there was some recent golden age in which we were close to the top of the UK premier division of prosperity and jobs. However, I do claim that our position is poor and deteriorating relatively as a result of government policies. We no longer have the high-wage jobs we had in the past. We now seem increasingly to specialise in low-wage, tedious jobs in areas such as call centres. Jobs in the high-paying financial sector elude us. Regional job creation and decentralisation of government entities, such as the Royal Mint and the DVLA in Morriston, seem to have stalled.

The Silk report has some alarming statistics on earnings differentials. Of the 1.4 million taxpayers in Wales, only 4,000 paid tax at the additional rate of 50p. Our economic and social profile shows a great dependence on the public sector—thus Wales is hit hard by the squeeze on public sector jobs. There is greater poverty, greater dependence on welfare and, therefore, more vulnerability to the Government’s welfare changes. The Rowntree Foundation report, published in September, concluded that 26.5% of the working-age population of Wales was economically inactive in 2012. This was higher than in Scotland or any English region.

I recently spoke to a young graduate with a good honours degree and a master’s degree. The only job he could find had no prospects and a wage of £12,000 a year. I invite the Minister to look in the windows where jobs are advertised and see the type of jobs on offer. I wonder how that young man reacted if he heard Boris Johnson exulting in greed and inequality, or if he saw last Friday’s Evening Standard headline: “London has 2,700 bankers earning more than £1 million”. This compares with 212 in Germany, 117 in France and 109 in Italy. I wholly agree with my noble friend that it is hard for a Cabinet with so many millionaires to understand the plight of the poor in Wales. Our Government are just out of touch.

The bedroom tax has already been touched on, so I will not mention it, save to say that the prospect of downsizing to single-bedroom houses is just not available for the great majority of people who are now on housing benefit.

South Wales is the region in Britain with the highest combined gas and electricity bills, while north Wales has the third-highest. The number of energy accounts where the customer has fallen into arrears has increased more in Wales than elsewhere in Britain. In 2012, Wales had the highest proportion of workers who earned less than the living wage than elsewhere in Britain. Clearly, government action—or rather inaction—affects us the most. I could continue with these depressing statistics, so one is inclined to consider some dramatic moves, such as, for example, the abolition of the Severn Bridge tolls, which work as a heavy tax on the Principality.

In conclusion, I recall a classic cartoon that showed people standing on the steps of a ladder that descends into water. One person stands on the lowest rung, with the water up to their neck. Let us call him or her “Wales”. Someone then arrives and boldly proclaims, “I feel your pain; we are all in this together”, and orders everyone, save those on the top rungs, to take one step down in the interests of austerity. Let us call that person “the Government”.