Inequalities

Lord Davies of Oldham Excerpts

Thursday 13th June 2019 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, this has been an excellent debate, led by a superb opening speech from my noble friend Lord Dubs, whom I congratulate on securing this important debate on such a significant subject. Of course, we all enjoyed the maiden speech of the noble Lord, Lord Ravensdale. He will know that there is a limited number of engineers in the House and we are very pleased to see him supplement their number. There is no doubt that he will get a warm welcome from them, and from all of us who recognise that a great need of the British economy, if it is to improve, is to see engineers in positions where they play a more significant part in companies than many of them do now.

We should also recognise the significance to this debate of the work of the IFS—not only what it is promising to do in the long term but its reports thus far, which have identified that among the wealthier nations the United Kingdom is second only to the United States in economic inequality. One would think that it would be a priority for a Government to address that, yet we have to recognise that over the past decade, far from making it a priority, the Government have exacerbated the situation. My noble friend Lord Hain emphasised how much the policy of austerity was born not just of seeking to create a more secure economy but of the ideology of a Conservative Government: the belief in a smaller state.

Just at a time when the Government need to make a contribution to the welfare of society, we have had a decade of massive reduction in the power of public authorities. Even the Conservative authority of Northamptonshire has been brought almost to bankruptcy. There could not be a clearer case of not recognising the crucial role that local authorities are destined to play in our welfare.

Of course, there have been a number of contributions in this debate on health and education matters, in particular the collapse of Sure Start, and on services that local authorities can no longer provide. This, of course, has increased the pressure on less well-off families.

That is against a background where less well-off families are facing two big problems. One is that there has been an effective wage freeze for more than a decade, so that while it is true, as noble Lords have pointed out in great abundance in this debate, that the chief executives of the top FTSE companies have seen a massive increase in their resources, wages have effectively been frozen. Is it surprising, therefore, that there is enormous anxiety and concern among so many people?

In addition, there has been a sustained onslaught on benefits. My noble friend Lord Liddle identified universal credit as something that has caused great concern. My goodness, the Government have been seeking for several years to introduce fully universal credit, and they are still struggling with the fact that the premise on which it is founded has crucial weaknesses. The cost is borne by people with limited resources, so is it surprising that people find it extraordinary that the Government think that they can take a five-week delay in the payment of necessary benefits and not be in considerable distress? We know that the Government are rethinking aspects of that most important benefit, which has contributed significantly to the demoralisation of so many people.

Even the Government’s proudest boast, which is that unemployment is at a historically very low level, masks the fact that a large percentage of people in employment are in the gig economy, where their jobs are not permanent and the number of hours they can work in a week—and therefore their earning power—is limited. But they have the great merit of depressing the unemployment figures, so the Government can congratulate themselves on that. However, it has little to do with the welfare of society.

As for Brexit, we already know that the Government have committed considerable resources to a no-deal outcome. They had to, because it was easy to identify some of the immediate consequences of leaving Europe without a deal. It looks increasingly likely that that is the future for this country, and the Government will have to think again about substantial additional resources to cope with the many problems that are bound to occur if we leave Europe without a deal. We must all hope that proves not to be the case, because all our leading politicians express that hope, but they do not give us great encouragement that the hope will be translated into reality.

Our society is broken in that respect. There is a lack of trust between the people and those whom they elect; there is a lack of trust, too, between the people and those who sit in all kinds of positions of authority over them in circumstances where failure stalks the stage.

I am grateful that this debate has ranged widely. A number of contributions have been thoughtful and have not concentrated too much on government policy. However, from this Dispatch Box, I can discharge my duty as spokesperson for Her Majesty’s loyal Opposition only by identifying the last decade, for which this Government bear responsibility for, as having created the circumstances that are causing so much anxiety, distress and unhappiness among the British people.