My Lords, I am grateful to the Government Chief Whip and the usual channels for granting me this opportunity to move a Motion that is very dear to my heart—thank you. I commend Her Majesty’s Government for their rapid action in the current crisis and, through unprecedented public spending, working to protect jobs and avert millions of redundancies. It is in the light of this recent health emergency that I beseech your Lordships’ House to take note of the case for increasing income equality and sustainability.
Last Thursday, the noble Baroness, Lady Bennett of Manor Castle, opened a Question for Short Debate on Covid-19 and people living in poverty. I believe that what we are doing today has the potential to make a lasting difference. As Amelia Earhart, the first woman to fly across the Atlantic, said:
“The most difficult thing is the decision to act, the rest is merely tenacity.”
As long ago as 28 April 1909, Winston Churchill, then president of the Board of Trade, gave a speech in the other place in which he said:
“It is a serious national evil that any class of His Majesty’s subjects should receive less than a living wage in return for their utmost exertions.”—[Official Report, Commons, 28/4/1909; col. 388]
Not much has changed since. That principle remains as strong as ever in our national life.
Ten years later in 1919, after a world war and a global flu pandemic, the International Labour Organization constitution affirmed:
“Peace and harmony in the world requires an adequate living wage.”
The economic argument that workers should be paid a fair and living wage was not new even then. In 1776, Adam Smith, said to be the father of modern market economics, wrote:
“Servants, labourers and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.”
My Lords, I remind your Lordships that this is a time-limited debate. This means that contributions are limited to two minutes, to enable all speakers to contribute and the Minister to give the fullest possible response.
My Lords, I congratulate the most reverend Primate on initiating this debate. It is timely, since Covid-19 has provided politicians with the opportunity to put well-being before growth. The crisis which has brought so much pain and damage has also given rise to greater social interaction and neighbourliness, and a desire not only to take care of each other but to show respect and affection for those who care for us. NHS workers and carers across the country have become an intrinsic, tangible part of our family and daily life, whom we now depend on and embrace. Their prominence has been made possible as fast living and the consumer-driven lifestyles that fuel income inequality have been put on hold. In their place, the appeal for voluntary helpers has exceeded all expectations. Party politics effectively evaporated in the corridors of care. In place of prejudices and barriers, we are witnessing social cohesion, friendliness and mutual support. People have rediscovered those they live with.
Income inequalities are divisive the world over. As with other sustainability issues, the social and business consequences are inseparable. Correlations between a nation’s degree of income inequality and its rates of domestic abuse, crime and obesity will come to the fore again. Every one of these “social” problems blights and imposes a huge tax on society. But this health emergency provides the opportunity for a new approach and for closer collaboration, transitioning to sustainability in an overcrowded world.
It is not just our politicians but our companies, our religious leaders and our opinion formers who have a responsibility as we emerge from Covid-19. We must all take ownership; we must all take action; we must all take an interest. We must not ignore the important lesson we have learned: that we can put well-being before the excesses of economic growth.
My Lords, it is a privilege to pay tribute to the most reverend Primate the Archbishop of York, whose commitment to equality shone through in his opening speech, as it has done throughout his career. I hope that he will continue his campaigning work in the years ahead.
Britain is a deeply unequal society. Income inequality is the fifth highest in the OECD, and there are vast inequalities in wealth, opportunity, education and life expectancy. It is tempting to believe that the Covid-19 pandemic is a great leveller, yet these inequalities have become greatly magnified. The economic effects of the pandemic are disproportionately experienced by the low paid and the young. Those working in shut-down sectors are seven times more likely to be the lowest paid, and those under 25 are three times more likely to work in hospitality or retail—sectors that have closed entirely. The health risks are disproportionately borne by the poor, those from black and minority-ethnic backgrounds, and women, because they are more likely to be key workers, live in cramped accommodation, or have an underlying health condition.
Alongside exposing the inequalities in our society, this health emergency also risks exacerbating them further. Unemployment will be concentrated in the lowest-paid sectors, potentially scarring future employment and earnings. Those soon to leave school or graduate will enter a labour market in severe recession, with lower job prospects and wages. For school-age children, prolonged periods out of the classroom are particularly damaging to those from poorer backgrounds.
Despite this bleak picture, the response to the virus has shown us a better way. While homelessness has doubled over the past decade, funding has now been found to house more than 90% of rough sleepers. Meanwhile, air quality has dramatically improved, as nitrogen dioxide levels have halved. No one, of course, would choose for life to continue as now, but we do face a choice about the society we want to be. As we commemorate VE Day, let us remember how that victory signalled a desire for change, and go forward with the same determination to build a new social contract, fit for the future.
My Lords, I wish to support the case for a universal basic income. The current crisis has shown the need for people to have access to basic funding, yet the machinery to deliver cash to many people does not exist. Many key workers on whom we now know a functioning survival economy depends—not just health and social care workers but delivery drivers, shop assistants and food producers—are all paid below average. Others, such as those on zero-hours contracts, those living within the cash economy and some self-employed people, are missing out altogether.
The post-Covid-19 scenario may be for higher unemployment and less job security. Work patterns are likely to change radically as more technical solutions are applied. It is true that new technologies may create new jobs, as some argue, but they may also make some jobs redundant. That will leave a small number of lucrative activities; some, but fewer, low-skilled and lower-paid jobs; and, overall, not enough employment to go round. We surely cannot contemplate a society where a small minority corner the jobs and opportunities, leaving the overwhelming majority behind. It is not only unfair but likely to prove politically unsustainable.
The scale of government intervention in the past two months shows that a universal basic income could be affordable. If it were set at between £50 and £100 a week, it would provide basic peace of mind and security, but not at a level that would deter people from joining the workforce if they could. It would also make people more willing to engage in consumption, and would therefore act as a stimulus to the economy. It certainly should not be buttonholed in any ideological category. It can be applied in a way that is economically and socially beneficial, right across society, and could sit alongside other targeted benefits. It could be funded through taxation in much the same way as child benefit, which is clawed back progressively, up to 100% from higher earners. A universal basic income would make a significant contribution to evening out income inequality. It is an idea whose time has come.
My Lords, one of the main economic risks from the pandemic will be the likelihood of mass long-term unemployment, as we experienced in the 1980s. Today, the Resolution Foundation predicts a 600,000 increase in youth unemployment this year—this is just the beginning. The pandemic is destroying economies across the globe, and recovery will take time. Long-term unemployment destroys a person’s confidence and mental health, while employers are very reluctant to take on demotivated, depressed, unemployed people. The most at risk of unemployment are the least well qualified; this is fundamentally an issue of inequality.
At a time of mass unemployment, the punitive universal credit regime, providing minimal benefits within a fear-inducing sanctions framework, becomes immoral. Unreformed, it will create serious mental health problems, crime, and an even bigger drugs problem, funded by crime, than we have already.
A part of the solution will be active labour market policies and the job guarantee. In 2005 and 2007, the OECD published evidence of the effectiveness of such policies, which ensure that, after a specified period out of work, an unemployed person will be offered work in the public or charity sectors at the rate for the job, probably at the minimum wage. Denmark and the Netherlands were examples of countries which pursued such policies and had low unemployment against the trend. Had the UK adopted these policies, we would not have had 2.5 million out of work for about four years after the global financial crisis of 2008. Yes, there would be a net cost to the Exchequer, but the benefits would far outweigh those costs: the improved employability of those involved and higher tax revenue and lower benefit costs over time; and, at the personal level, less mental breakdown, crime and drug use. In essence, it would mean greater equality and sustainability and a healthier and happier society.
2:37 pm
The Archbishop of Canterbury
My Lords, first, I thank the most reverend Primate for tabling this debate today, as well as for a lifetime’s work of battling inequality. May we continue to benefit from his wisdom and prophetic voice. I also look forward to hearing the maiden speech of the right reverend Prelate the Bishop of Derby.
I wish to highlight the issue of those particularly at risk because they do not have the right to access public funds. Migrants are more likely to be self-employed, in temporary work, or working in industries which have been especially badly hit. They are less likely to own their own homes, risking homelessness if they lose their income. Concerns have been raised that migrants may be compelled to continue working even if they become ill as to stop would be to risk destitution, which puts their and others’ health at risk.
We rely on the contribution of migrants to our society and economy. Some 850,000 migrants work in our health and social care sector, while they make up 40% of our food manufacturing industry. These are essential industries. They are working on our farms so we can have food on the table. We owe them deep gratitude.
After the Grenfell Tower disaster, the Government confirmed that
“all victims, irrespective of their immigration status, can access the services they need, including healthcare and accommodation.”—[Official Report, Commons, 22/6/17; col. 167.]
Can the Government give a similar confirmation now, and suspend the NRPF condition to allow migrants to access public funds?
Many of those without access to public funds are supported by small charities, which themselves face existential threats due to the health emergency. Will the Government continue to offer more support to those charities before they are no longer able to function and pick up their normal operations?
Christ teaches us that every human is equal before God. I pray that, as we face these extraordinary times, we seek to enact policies that affirm the dignity and worth of all as we have seen it in their contribution to us.
My Lords, I am not in favour of a universal basic income. It does not add up arithmetically, it does not improve living standards and, where it has been tested, it has not been a great success. I ask my noble friend about food and feeding those on the lowest incomes—a subject one of the House’s committees is currently looking at. The statistics are that, in 2017, 90,000 people died prematurely due to ill health. Some 20% of the population suffered from obesity, and the cost to this country in that year was £54 billion. Much needs to be done by the Government and us, both corporately and individually, to reduce these numbers.
Food standards and quality are integral to this. Can my noble friend the Minister tell me, in taking back our sovereignty and tackling this problem, which is more important—maintaining our high food and welfare standards or agreeing a trade deal that allows cheap food imports farmed to less rigorous standards? I also ask my noble friend what plans the Government have to secure the supply of basic food to those who can least afford it, particularly in these troubled times.
2:41 pm
20 of 109 shown
Many jobs fall far short of this ideal for millions of workers across the United Kingdom. The truth we now see is that the vast majority of front-line key workers are hard-pressed on poverty wages.
Kate Pickett’s and Richard Wilkinson’s ground-breaking book The Spirit Level showed that a wide range of social problems are more common in societies with larger income differences between the rich and the poor. The solution must be to narrow the gap between wages and basic living costs. The creation of an economic equality and sustainability commission would help to facilitate the creation of more income equality and a fairer society that would solve many of the pressing social problems such as the supply of genuinely affordable homes and social care provision. David Cameron, before he was Prime Minister, acknowledged:
“We all know, in our heart, that as long as there is deep poverty living systematically side by side with great riches, we all remain the poorer for it.”
When I was Bishop of Stepney, I soon became aware that low-paid workers there were having to work two or three minimum wage jobs but still struggled to make ends meet. At that time, the Living Wage Foundation, started in Bethnal Green in 1997, called on businesses to recognise the important role of their “invisible” workers and pay them a real living wage.
A recent Living Wage Foundation publication from 3 March 2020 quotes two case studies of year 6 pupils. The first says:
“Mum works extremely long hours to make ends meet—often do not see parents for long periods. Choice between paying bills and paying for food.”
The second says:
“Mum works as a Care Worker and is paid £8.21 an hour. Have to do the dishes and keep things tidy at home—I have my chores to do. Mum is not supposed to work weekends but works Saturday and Sunday—comes home, has dinner, watches TV and goes to sleep. I am lonely. This”—
a living wage—
“would make a difference to my family.”
I am very proud to support the proposals from the Living Wage Commission, which I chaired, for the real living wage, calculated according to the cost of living, providing an hourly rate of pay that is independently calculated each year. Rates for 2019-20 are £9.30 across the UK and £10.75 in London. This living wage applies to all directly employed staff over the age of 18, regardless of the number of hours they work. We need to distinguish between Her Majesty’s Government’s national living wage—a higher minimum wage rate for over-25s—and what I referred to as the real living wage, through which families do not go short.
If we support the principle that those who are least well-off should get the most help, it is shocking that children living in poverty have not been the number one priority in the unprecedented package of support announced by the Chancellor. The coronavirus national emergency is already exposing the inadequacy of the safety net provided by our social security system, as more people who have not previously relied on benefits get to experience how mean it really is. Hopefully, this will lead to a more generous and compassionate system. So, why not increase the national living wage to £10 per hour for everyone now? The time has come for us all to stop talking about welfare benefits and talk instead about social insurance, a term which underlines both that our focus should be on need, and that we are all in this together.
The biblical vision is not of a world in which individualism and consumerism are the purposes for which we are made, but one in which we are created for fellowship and mutual responsibility. It is of a world in which the principal aim of policy is to enhance the well-being—that is, the personal and communal flourishing—of all in society. The challenge is to articulate a vision of that eudaimonia; not a word much used in Yorkshire or in your Lordships’ House, but a useful Greek word to describe the well-being and flourishing of a community and all those within it.
Dame Julia Unwin, in her chapter in the book I edited, On Rock or Sand? Firm Foundations for Britain’s Future, analysed the changing face of poverty in this country, including the rising gap between the rich and the poor. She also highlighted the new and deeply worrying fact that for the first time, the historic link between poverty and unemployment has now been broken. She writes:
“The notion that hard work will enable people to leave poverty and build a life of self-reliance has been broken. Instead the prospects of work provide intermittent activity, limited reward and no security.”
After the current crisis, the major concern of our age is sustainability. It is becoming ever clearer that income equality is a precondition for moving to environmental sustainability. It now seems inevitable that people all over the world will suffer endless environmental crises and hazards, leading to displacement and food shortages. As well as a need for better systems for emergency aid, much will depend on a strong ethos of mutual support between neighbours as well as between countries. That is fostered by greater equality, as Richard Wilkinson and Kate Pickett have shown in both The Spirit Level and more recently in The Inner Level. Greater equality is the basis for stronger community life and indeed a greater capacity to be united in a response to the climate emergency.
It is therefore crucially important to reduce income differences both before and after tax. We need to make income tax highly progressive again and to have higher taxes. To reduce inequalities before tax, all employers should, as a minimum, pay the real living wage. In English cities where Labour-controlled local authorities have set up fairness commissions, they have almost always become living wage employers. They have successfully communicated their real living wage commitment to everyone they do business with and have encouraged them to consider implementing the real living wage for the real cost of living.
The current crisis has made all of us aware of the need to recognise the value of our key workers. Please listen to the words of Linda, a carer:
“Since I started being paid the living wage I haven’t had to worry about if I can pay the bills and more importantly than that, I get to spend time every day with my mum and daughter and I’m not falling asleep on the sofa as soon as I get in. I eat better, I sleep better and I’m much less stressed”.
That is from a page in the Living Wage Foundation’s guide.
The Scottish Government and Wirral Council recently took bold steps to support care workers, committing to uplift them to the real living wage—including ancillary workers such as cleaners and catering staff. Some of the local employers have been paying their workers a real living wage since long before the crisis, recognising that higher pay benefits not only workers but businesses, through lower staff turnover and lower absenteeism. Care work is a huge industry with around 1 million workers supporting some of the most vulnerable people in society, often for incredibly low pay. For too long, its importance has been undervalued and underfunded but now there is a real opportunity to create lasting change in the sector.
As we emerge from this crisis, we must look again at how we value this work and pay for it. It is time to rethink how government, public bodies and businesses work together in order to bounce back better and ensure that there is adequate funding, so that all care work is rewarded with, at least, a real living wage. Then, we must deliver fair pay rises for our key workers and rewards for workers across the economy, to restore what they have lost through 10 years of cuts and slow growth. Let us make paying the real living wage the litmus test for a fair recovery. Let us help our country become a place where the wellsprings of solidarity—of a new, undivided society—can begin to spring up, and then go beyond the real living wage. Income inequality is the great giant of our time, which we must slay. The real living wage is a crucial tool in our armoury, but the living wage is a first and vital step in challenging inequality.
Let me end by sharing with your Lordships the four guiding principles which have impelled me to work tirelessly to promote the real living wage. The first is that all human beings are of equal worth in the sight of God. There is no one and no group of whom we can say “They are less important” or “They don’t matter”. The needs of the other person are always as important as my own. The second is a commitment to offer everyone the opportunity to flourish. A society is well ordered only in so far as it offers ways of flourishing to all its members. The third is a recognition of our human interrelatedness and interdependence. As the African proverb says, “When a tiny toe is hurting, the whole body stoops down to attend to that toe”. The reality is that we are all inextricably bound up with each other’s welfare. We rely on each other; if one suffers, sooner or later we will all suffer. Covid-19 and the lockdown have vividly demonstrated this for us all. The fourth is the need to accept our duty of responsibility by using our God-given potential both for ourselves and to serve others. I beg to move.