Income Equality and Sustainability

Lord Tunnicliffe Excerpts

Wednesday 6th May 2020 Lords Chamber

[Lord Tunnicliffe (Lab)]

My Lords, I too thank the most reverend Primate the Archbishop of York for introducing this debate and for his service to the country and the House of Lords. I also welcome the right reverend Prelate the Bishop of Derby—my hometown—and look forward to her future contributions after such a good maiden speech.

It has been an interesting debate, wide-ranging and touching on many points. I will try to give a personal perspective on inequality, which is about so much more than income. When I was young—I was born in 1943—we were poor. But my father had secure employment as a porter in the National Health Service. We had a council house, with security of tenure. We had controlled rents. In summary, we lived poor but in no fear. Today’s working poor are the very opposite. They have low incomes, employment insecurity, housing insecurity—frequently because they do not have security of tenure—and escalating housing costs in the private sector. They have lived over the last 10 years with declining public services on which they disproportionately depend.

The working poor live in fear, a fear that most of us in this House—there may be exceptions—cannot begin to imagine. When things go wrong, they go very wrong. If people are in the wrong part of the economy—including large parts of the care and hospitality sectors—when things go wrong, as Covid has illustrated, they go catastrophically wrong.

However, there are other features of inequality which we must not ignore. The most obvious of these is the inequality of capital and asset wealth. This is where housing, for some, instead of being a problem, is the opposite. My own house is probably now worth, in real terms, two or three times what I paid for it, without anything having been done by me to contribute to that appreciation. Housing ownership exacerbates inequality in a number of ways, including in retirement. The working poor are likely still to be in insecure rented accommodation when they retire; the affluent will by then almost always own their own house and their retirement will therefore be that much more comfortable. The inequality of capital wealth flows through to subsequent generations through inheritance. We must not forget also that there are inequalities through responsibility, where carers look after their young and old, as well as inequalities in standards of work and in relation to work satisfaction.

Poverty is wrong. Poverty in all its forms is unfair and uncaring. It creates a society that is unfair and uncaring. This is in income, housing, security and fear. In my experience, high pay is unnecessary. Most high pay depends on bonuses. Bonuses pervert behaviour and we know that we get some pretty perverted behaviour as a result of them, as the noble Lord, Lord Balfe, noted.

The economic and social effects of Covid-19 will take many years to run through. Instead of seeing these as a threat, we must see them as an opportunity—as some have said, a Beveridge moment. We must try to get a better understanding of our society and of inequality and its effects. I believe that a better understanding will lead us to a more equal society, a society more at ease with itself, with a more holistic understanding of value, not simply of wealth.