Families: Cost of Living

Lord Davies of Oldham Excerpts

Thursday 31st October 2013 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, this has been an excellent debate, and we owe a debt of gratitude to my noble friend Lady Prosser for both securing the debate and introducing it in such an expansive and perceptive way that it gave all other contributors some substance on which to cohere. She reflected on the changes in our economy and society over the past three decades, and the change in the nature of work. We have moved from a much more substantial manufacturing base 30 years ago and lost our capacity to make cars, unless the Japanese are employing British workers; all our companies apart from Jaguar Land Rover went down. The movement from the manufacturing industry to the services industry has produced a change for workers, with much greater part-time work; the emergence of the concept of zero-hours, which seems such an offence to the dignity of people presenting themselves for work; and the reduction in the bargaining power of the workforce.

The Government are represented today by a single voice from the Back Benches, the noble Lord, Lord Horam, who introduced some challenging concepts on which, if he will forgive me, I will not dwell too much on this occasion, because my noble friend Lady Drake raised the whole issue of how much the reduction of equality leads to the impoverishment of society, and what that means to those at the bottom end.

I am very grateful to the right reverend Prelate for identifying the community and local dimension of difficulty in acute economic circumstances, where a whole neighbourhood is beset by poverty among so many households. My noble friends have been concerned to emphasise the sheer blatant facts of the failure of wages to maintain the level of inflation. For wages to be stagnant over a decade when the inflation rate is more than 2.5% throughout that period is a reduction in the resources of working people. That is to say nothing about the level of unemployment, which also means that very many do not have work at all. Those in work have also suffered greatly in that period, at a time when on all sides we have been beset by the concept of the bonus culture and the “get rich quick” dimension of the City.

If we are talking about inequality, let us talk not just about inequality between groups but between regions. The real desperation of our nation at present is a ridiculous concentration of resources in London, which distorts the whole perspective of national statistics, but is reflected in the fact that ordinary Londoners are less able to get homes than people in other parts of the country. I was very grateful to the noble Baroness, Lady Tyler of Enfield, for her reflections on that point. She also raised the crucial question of energy. Let me emphasise that as we approach the depths of winter, the anxiety of people faced by the increase in energy bills at present is profound. Added to the insecurity which they suffer about the world of work, they are now facing circumstances in which the increasing bills will thrust many of them into considerable debt and, in order to avoid debt, into taking risks with keeping the household warm.

I know that there has been an element of dismissiveness about Ed Miliband’s proposal for a price freeze. However, that freeze is to do two things: first, to protect people in this crucial period of need so that further increases do not take place and, secondly, because we are concerned to restructure this imperfect market represented by energy. Of course, that means looking at the structure of Ofgem and its failure to avoid a situation in which our energy is overwhelmingly run by a group of six in a cartel, which play follow my neighbour in enriching themselves at the expense of ordinary members of the public.

One dimension that has not come into this debate but which is also of great significance to people on low incomes is the increasing cost of transport. I emphasise the cost of buses. Poor people do not travel a great deal by train, although those people who do become poor because of the massive increases in fares that the rail companies are able to perpetrate. Poor people travel on buses and are continually seeing those fares increase by more than double the rate of inflation. Travel costs are a very great concern for the person with a part-time job, and limited opportunities to work, who has to travel. That is so even for the person with a full-time job who has to travel. It is also true for our young people. How are they meant to get to their colleges and engage in education in circumstances where travel costs are so great?

I emphasise also a fact which my noble friends have covered very fully, as they have all aspects of this debate. There is a real issue of the pressure on housing. A very large percentage of our population are now in the private rented sector, and we all know the rate at which rents are increasing. Nothing is more disturbing to a family or to individuals than to feel that their housing costs are running out of control. As for whether one can get into the housing market with a purchase in London, unless a family is earning £100,000 a year its entry into the housing market is very difficult indeed. We all know the particular approach of the Government in their limited position with regard to 5% mortgages. The anxiety about that is obvious enough: that it will stimulate a housing bubble which will put us back to 2007-08, unless we are very careful.

In this debate, my noble friend Lady Prosser engaged with the fundamental issues of how people protect themselves and achieve security in a society in which so many issues are stacked heavily against them. She was followed by contributions from all parts of the House, but overwhelmingly from my own Benches, which have identified just where the Government need to act. It is a tough agenda that we have set for the Government, but the Minister has already been identified as our treat, so let us listen to him.