Our election pledge was clear: after commitment to the NHS and social care and protecting the environment, ‘We will help people with the cost of living.’
We knew that was what most people wanted, after we had knocked on 2,741,251 doors (thanks, HQ!) in the General Election campaign, and national focus groups and polls had confirmed it.
A Labour Party study into How Labour Won, reported in The Guardian, found that people voting Labour in this campaign had the same priorities. But what is the new Labour Government doing to help with the cost of living?
Taking the Winter Fuel Allowance away from millions of pensioners was a poor start. Justifying that by referring to the expected increase in the Triple Lock payments next April? The point seems lost on this Government, that pensioners have to try to live through the coldest months of this winter before April, now missing the extra hundreds of pounds that had helped with heating costs in past winters.
Our MPs moved a motion against the cut in the Commons. And now is surely the time for our Leader to challenge Keir Starmer at PMQs on the continuing crisis of the cost of living. The cost of gas and electricity went up on October 1st. The price of oil may rise with the continuing Middle East conflicts. Yet the help with household energy bills which was even managed by the late Conservative Government is not being offered now.
It should be. The economic resources available to the new Chancellor should not be wholly focused on investment for growth this autumn, when so many people need a helping hand at once. Our Manifesto pledges us to ‘Tackle child poverty by removing the two-child limit and the benefit cap’, and calls for an independent commission to recommend further annual increases in Universal Credit. Our policies show a dedication to tackling poverty which seems to be lacking in the present Labour party, and which our Parliamentarians will need to keep pressing on the new Government. But just now, everyone is affected by the rising costs.
At this moment, we are entitled to ask this Government, what will you give in your Autumn Budget to help ordinary people cope with the cost of living crisis this winter?
* Katharine Pindar is a long-standing member of the Cumberland Lib Dems
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68 Comments
The way the windfall tax on energy companies works may well be the first on a list of things to look at. The idea, at least as promised on pre-election Labour leaflets, is to use the proceeds of the tax to help reduce our fuel bills. I think “up to £600 p.a.” was the claim. We don’t see much evidence of this actually happening though.
I suppose that was when the Labour Party needed our votes. They won’t need them again for another 4 years or so.
One of the problems is a loophole in the tax rules which allows energy companies to deduct 91% of their tax bill if they invest in finding now sources of energy which in practice means looking for more oil and gas to extract.
https://neweconomics.org/2023/11/the-windfall-tax-was-supposed-to-rein-in-fossil-fuel-profits-instead-it-has-saved-corporations-billions
I calculate that by April the state pension will have increased over the last 3 years by £400 above inflation which is more than the fuel allowance and it will continue to outstrip inflation.
@Russell. It can never be explained too often. A percentage rise is meaningless, unless you consider the baseline: ‘outstripping inflation’ is therefore a false comparison.
The National Living Wage went up 10% in April. Outstripping inflation. Yet somehow, I doubt workers feel massively better off for that extra (on average) £41 a week.
The state pension, meanwhile, is like to rise £8.80 a week in April..
…oh, and it’s not ‘just’ energy bills that are rising. That £8.80 has to cover increases in food, water, council tax, insurance, phone etc, household basics… So to be meaningful, if you compare the pension increase to inflation, you should also work out how much per week people’s outgoings have/are going up at the same time.
Thanks again to K P for her continuing speaking up for those so harmed by successive governments!
It is hoped that the following “A. L. D.” (Actual Lived Data) information will support her and even lead towards a reduction of the increasing abuse of so many of our fellow citizens and their children.
There has been a 61% increase in homelessness since 2010. (Crisis)
In 2010, there were 35 Tresell food banks.
In 2019, there were 1,300 Tresell food banks.
Since 2019-2020, there has been a 24% increase in the number of Tresell food banks.
@ Peter Martin. Thanks for the useful info, Peter, which will be good to pass on.
@ Cassie. Likewise, those are good responses to explain how little the increases count in everyday living, thank you. I also wanted to mention to Russell that warding off old age in a household, particularly if there is another elderly or/and sick relative to be cared for, tends to be expensive. I think successive governments have recognised that over the years, as everyone reaching old age on average wages and limited pensions tends to find.
@ Steve Trevethan. How right you are, Steve, to draw attention to the vast increase in the Trussell Trust food banks over the past decade when the average wages have scarcely risen, and the welfare ‘safety net’ has become full of holes, despite all our party’s policies which would mend them. I understand there are also now ‘Multi-Banks’ in many towns, where the food bank provisions are accompanied by many free basic household items, particularly those needed for new mothers and small children.
As a former Chair of a Trussell Trust Foodbank, I hope I may be allowed to thank Steve Trevethan for raising the matter of the exponential rise in Foodbanks in recent years.
The Trussell Trust currently runs a network of over 400 foodbanks, giving emergency food (and other items) to support to people in crisis across the UK. It is a sobering thought – certainly for those of us who have been long standing Liberals and Liberal Democrats – that between 2010 and 2015 the number of people receiving food aid from Trussell Trust foodbanks jumped from 61,500 to over a million.
We have a real opportunity right now to promote the long held Liberal policy of eradicating poverty. Labour in office have already demonstrated that they will put finances above need and the Tory record is their for all to see.
We are rightly opposing the cut in the winter fuel payment and the retention of the two child limit for child benefit. However we should also be highlighting our policy of a universal basic income as a necessary measure not just to assist in eliminating poverty but also to prepare for the inevitable job losses which will come as the Fourth Industrial revolution gathers pace.
@ David Warren. I am so pleased to read your comment, on the opportunity we have now to promote our policies on tackling poverty. Yes! Throughout this Parliament we should be nagging the new government on this. The policy we passed at the York Conference in March 2023 (F12, based on the policy paper 150 Towards a Fairer Society) committed us to try to ‘End deep poverty, including a radical overhaul of the welfare system, so no family ever has to use a food bank in Britain, by taking immediate steps to repair the safety net…’ And we agreed there that our former commitment to Universal Basic Income would now be replaced by ‘Introducing a Guaranteed Basic Income by increasing Universal Credit to the level required to end deep poverty within a decade and removing sanctions.’ So we offer a program that we can commend to the new government that they can actually carry out, if they aim for two terms of their leadership, a decade in which deep poverty CAN be eliminated. We will have to take the lead on poverty reduction in this Parliament.
” Labour in office have already demonstrated that they will put finances above need ….”
It’s not an ‘either-or’ choice to make. Solving the poverty problem will require the use of financial instruments in the form of higher taxation for some, lower taxation for others and higher government spending generally. Taking account of the finances doesn’t necessarily mean balancing the books. It means using the finances to balance the economy. If the economy is working reasonably well, any Government deficits and the level of the pound on the Forex markets won’t be a major issue.
I doubt that there is anywhere near enough public support for a Universal Basic Income for it to be a realistic political option. There may be more support for a Guaranteed Basic Income but this will likely be because it will sounds to many that the level of the minimum wage will be higher. They won’t be in favour of the taxpayer subsidising the wages of workers whose employers could well afford to pay more. They won’t, rightly or wrongly, be in favour of a general increase in benefits to the unemployed.
Lib Dems do have a peculiar view that those who are in poverty can and should be removed from poverty without asking anything in return. Unfortunately this view isn’t shared by most of the voting population which does fundamentally limit any prospects for success.
PeterMartin “It’s not an either-or choice to make”. Agreed, but this ultra orthodox economist we now have a Chancellor, absolutely believes it is. It is treasury orthodox writ large.
I really hope our new treasury spokes speaks out against this nonsense, but I fear she won’t because our party is still wedded to the economic ideas promulgated by Thatcher and not to Keynesian or post Keyensian Economics never mind MME.
We’ll see, but I’, not holding my breath.
What @MickTaylor said!
After going on and on about the £22 billion “black hole”in the new government’s financial inheritance ( I do wonder if these people have any concept of what a black hole actually is – I imagine this one sucking in all the electrons from every budget for ever :)))
Anyway a £22 Bn shortfall , shall we say. Suddenly Ed Milliband, Rachel Reeves and Keir Starmer find – guess what – £22 Bn down the back of the sofa!!! ” And what are they going to spend it on? ” I hear you cry. They’ve discovered a £22Bn Carbon capture scam from the fossil fuel companies that they really, really cannot resist. AFAIK the only known benefit of pumping CO2 into old oil fields is to get more oil out. CCUS has never been known to work at scale yet, and even if it did takes immense amounts of energy to liquefy the CO2, and would almost certainly leak out of wherever you put it within the 1,000 years it would have to stay there.
If they have this money to spend, then they should start off by getting rid of the 2 child cap which would cost about 2.5£bn a year.
As Mr Raw points out, chronic hunger, malnutrition and destitution have been a spreading plague since the introduction of Austerity in 2010.
Who has gained from Austerity and who has lost?
Has our society, as a whole, gained or lost through Austerity?
Might L Ds oppose it, tooth and nail?
“Get off the austerity bandwagon. A healthy economy for all is the best thing for our society and Liberal Democrats.” (From H. Thorning-Schmidt)
@ Steve Trevethan “Might L Ds oppose it, tooth and nail ?” Good question Mr Trevethan. I hope I will be permitted to answer it.
Back in 2010 I had been a Liberal/Lib Dem party member ever since 1961. At the time I was also a Lib Dem Cabinet member for Social Care in local government in Scotland. I witnessed and had a good view of the outcome.
To answer your question, they might have done – but with one or two honourable exceptions they didn’t. They (including the present Leader) repeatedly voted for welfare cuts at Westminster. It’s all recorded on the ‘They work for you’ web site. That’s when I first became involved in the Trussell Trust.
In 1963, Harold Wilson, at the Scarborough Labour conference made his ‘white heat of the technological revolution’ speech.
Wilson said bluntly: nostalgia won’t pay the bills; the world doesn’t owe us a living; and we must harness the scientific revolution to win in the years to come. “This scientific revolution” he said “is making it physically possible, for the first time in human history, to conquer poverty and disease, to move towards universal literacy, and to achieve for the whole people better living standards than those enjoyed by tiny privileged classes in previous epochs”.
In March 1999 Tony Blair announced a commitment to “eradicate” child poverty in the United Kingdom by 2020. Gordon Brown announced Labour’s intention to enshrine in law the 2020 child poverty target in a speech to the Labour Party Conference on 23 September 2008.
In his leadership campaign, Keir Starmer pledged to “abolish Universal Credit and end the Tories’ cruel sanctions regime”. The commitment was dropped in 2023, and now the party simply talks of being “committed to reviewing Universal Credit so that it makes work pay and tackles poverty”..
So here we are 60 years on from Harold Wilson’s 1964 election victory and 25 years from the Blair/Brown commitment., still talking of tackling poverty. Without wholesale tax and benefit reforms (supported by the general public as the Beveridge reforms were), the same conversations will be continuing 25 and 60 years from now.
I agree with Joe Bourke that much more should be done to tackle poverty, though he underestimates the efforts made by Gordon Brown when in government…. many of which (e.g. Sure Start) were undermined in the austerity years of 2010-15).
In fairness, credit should be given for the introduction of the National Minimum Wage, Sure Start, increased financial support for childcare, significant increases in education spending and an expansion of the number of young people going on to higher education all contributed to an improvement in the situation.
I suggest Joe should look at the research done by the Resolution Foundation which shows that tax credits reduced the number of children living in poverty in the UK from three million in 1998 to 1.6 million in 2010.
Thanks, Peter Martin, for writing again, and I entirely agree with your first paragraph (9.01 this morning) – but not the second. The Guaranteed Basic Income isn’t to be compared with the National Living Wage. It’s a Beveridge-type provision in that people with nothing should be given a basic income (reassessed annually), which parties of the Left and Centre-Left should agree would be desirable.
But unlike the previously-supported Universal Basic Income, which I agree wasn’t likely to find favour with the working majority, the GBI we propose should be developed over a number of years by meantime raising the level of Universal Credit each year. The fact is that Universal Credit isn’t fixed at a rate sufficient to live on, as ordinary people can tell you. And so it is used as a supplement to wages, for instance when people (such as single parents) have to rely on part-time and insecure work for their main income – and the benefit cap (and housing allowance limit) make sure that people aren’t using the benefits to avoid work. How on earth do you assume that ’employers can well afford to pay more?’ We Liberal Democrats are working for ‘a fairer society’, and not demanding an end to inequality, which, like lifting everyone of working age to a basic level of income (60% of median income for type of household) should one supposes be one of the basic aims of this Labour government.
@ Mick Taylor and David Warren. We have indeed to keep pressing our Treasury spokesperson to reject the Neo-Con view of the economy and insist that giving people more money is not only fair, but allows then to spend more. Etc.!
@ Jenny Barnes. Thanks, Jenny, I had been hearing myself that this plan of carbon capture is of dubious viability. and as you say, if the Government has now realised that there is some more spending money to be taken from the fossil fuel companies, let them end the two-child benefit cap for starters to give some ordinary families a little help with their cost of living.
Might reasonable financial security depend upon expenditure as well as income patterns?
Might current socio-economic problems be affected by current socio-economic set ups and expectations which favour lenders more than borrowers and employers more than employees?
Might an essential role of a political party be to explain and explore more effective and benign possibilities rather than manipulate current, questionably based actual and projected public opinions?
@ Joseph Bourke. Thank you, Joe, for that sad reminder of what Labour governments have aimed for in the past sixty years and failed to achieve. Since the present government shows no such commitment to ending poverty, you are right, it will be up to us to press for the ‘wholesale tax and benefit reforms’ that are needed. I think we are even worse off in terms of inequality than in the time of the last Labour government, due to the greater accumulation of wealth by individuals in the Covid years, since 2020.
Katharine “this plan of carbon capture is of dubious viability. ” There’s no doubt in my mind. It’s a scam. Just something so that fossil fuel cos can pretend to do something about climate change while carrying on with business-as-usual.
Natural gas deposits are generally sealed from below by saturated aquifers. This works because methane is insoluble. Carbon dioxide is soluble. Leakage by diffusion through aquifers would be slow but inevitable.
@Cassie. Perhaps you misread my comment? If the state pension has gone up by £400 more than inflation then all pensioners are better off in real terms.
Russell:
State pension rises either with rate of inflation, rate of wage increase or two and a half percent. So it keeps pace with whatever is the greater that year. Whether it is is £400 above inflation is irrelevant, it will have kept up with wage increases which follow the rise in inflation.
To me the Fuel Allowance issue is a bit fallacious. It was £100 for many a year, brought in by Gordon Brown , then due to Covid and people being at home it went up to £300 each. To me the simple answer is not to cancel it full stop but go back to the £100 figure, (£200 for couples) and call it quits.
But unfortunately we have a government that is to put it plainly “just thick”
@JennyBarnes. I do not at this stage disagree with you but I would welcome pointers to where your information can be explained.
here’s one
https://www.iisd.org/articles/deep-dive/why-carbon-capture-storage-cost-remains-high#:~:text=This%20is%20a%20key%20reason,the%20costs%20of%20actual%20projects.&text=Source%20for%20modelled%20range:%20Moch,of%20which%20exhibit%20considerable%20variability.
Use google. If you run CCS off the back of a electricity generation plant, it takes around 1/3 of the energy to cool & liquefy the exhaust gas. So your powerplant efficiency immediately drops to 66%. Carnot efficiencies mean that the energy in the gas for a CC gas plant results in 50% of that energy in the electricity – so now it’s down to 1/3.
I suppose it’s one way of making gas fired electricity more expensive to reduce demand.
Far better to insulate houses.
https://x.com/GeorgeMonbiot/status/1686403492678696960
https://www.monbiot.com/2023/08/08/running-amoc/
“Far better to insulate houses.”
Indeed – from the viewpoint of the individual consumer.
But the suppliers aren’t going to tell you that.
@ Katharine,
I don’t really understand your point of:
“We Liberal Democrats are working for ‘a fairer society’, and not demanding an end to inequality”
I don’t think anyone is saying we should have absolute equality but I’d have expected you to say that a fairer society should mean we should have less inequality.
I think I understand what you are trying to achieve, though, which is to use the UC system to ‘top up’ wages. We do have to ask ourselves if this is going to be a subsidy to the workers or a subsidy to employers. We know that many potential benefits are unclaimed, so an employer can use its HR dept to ensure its workers are being paid the maximum possible in benefits. Given the vagaries of our taxation and benefits system it’s also quite possible that the company could show that an increase in gross pay would lead to a decrease in net pay.
This is quite an old article but I doubt that the situation is any better now. You ask:
” How on earth do you assume that ’employers can well afford to pay more?’ ”
In the case of Asda, Morrisons, Tesco, and Sainsbury, it’s not that difficult.
Have you asked the voters whether they think they should be subsidising low wages paid by profitable companies?
https://www.theguardian.com/sustainable-business/2015/apr/20/taxpayers-spend-11bn-to-top-up-low-wages-paid-by-uk-companies
As David Raw notes above, Gordon Brown did make signifiacant progress in addrssing child poverty. The IFS research Child poverty in the UK since 1998-99: lessons from the past decade points out “Direct tax and benefit reforms are very important in explaining at least three things: the large overall reduction in child poverty since 1998-99; the striking slowdown in progress towards the child poverty targets between 2004-05 and 2007-08; and some of the variation in child poverty trends between different groups of children. However, some of the child poverty-reducing impact of those reforms acted simply to stop child poverty rising as real earnings grew over the period, which increases median income and thus the relative poverty line. The performance of parents in the labour market is important too: between regions, parental employment and child poverty trends are closely related; the overall reduction in child poverty since 1998-99 has been helped by higher lone parent employment rates; and the overall rise in child poverty since 2004-05 has been most concentrated on children of one-earner couples, whose real earnings have fallen.”
Median real earnings are a function of productivity. A recent notable essay Foundations: Why Britain has stagnated argues ” that Britain’s problems are very simple. We have banned investment in most of the housing, business premises, infrastructure, and energy supply we need. There is no separate mystery about why investment is low – we have banned most investments we need to make. And there is no productivity “puzzle” – productivity growth is low because we do not build the basics that we need to produce more…For example, electricity prices are now vastly higher than they were twenty years ago.”
The full essay concludes “The good news is that the hardest things to create are ours already. No government can legislate into being a respect for the rule of law, appetite for scientific discovery and entrepreneurship, or tolerance of eccentricity and debate. Such a culture takes centuries to build: it is the most precious inheritance that we have received from the generations that went before us. By comparison, what we must do is surprisingly simple: get Britain building by removing barriers and lowering costs. If we can establish these foundations, growth and dynamism will follow. We have done this before. We can do it again.” https://ukfoundations.co/
@ Joe,
“we have banned most investments we need to make. And there is no productivity “puzzle” – productivity growth is low because we do not build the basics that we need to produce more… ???
Who’s “we” ? And how have “we.. banned most investments”. Most of the Utilities have been privatised, and, at least as far as I know, there has been nothing stopping the new owners making the necessary investments in such things as better water supply and sewerage systems, better and more affordable railways etc.
The reality is that we haven’t banned anything but “we”, or at least some of “us”, have had a naïve belief that the new private sector owners would not simply take advantage of their monopoly position in the market to make easy money.
“For example, electricity prices are now vastly higher than they were twenty years ago.”
It’s actually 34 years since electricity was privatised. Electricity prices will also be “vastly higher” than they were then even after allowing for inflation.
The real word evidence should lead “us” all to campaign to restore all natural monopolies to the public sector.
Growth? GDP? Fiscal rules? Thresholds?
The late, great Douglas Adams wrote:
“This planet has – or rather had – a problem, which was this: most of the people living on it were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movement of small green pieces of paper, which was odd because on the whole it wasn’t the small green pieces of paper that were unhappy.”
The Labour government have been busy talking about small green pieces of paper (yes, I know…) rather than human thriving. Means rather than Ends. While we must not “will the ends without willing the means”, being clear first about your ends then designing the means to achieve them is commonly regarded as sound project management.
Are we to have a thriving nation, or the best managed neo-liberal colony on the planet?
Perhaps Mr Starmer could enlighten us?
I’m grateful to Joe Bourke for highlighting the importance and relevance of the Institute for Fiscal Studies report, “Child poverty in the UK since 1998–99: lessons from the past decade”, by Mike Brewer, James Browne, Robert Joyce and Luke Sibieta, October 2010.
I’d be grateful even more if he could tell me how much notice and response was taken of this valuable document by the Coalition Government between 2010 to 2015. To be fair the revival of school meals was one such palliative response, but over all I’m afraid the overall impact of welfare “reform” (the disingenuous term for cuts) undermined this.
Sadly, and with some reluctance, I have to say to my friend Katharine that this – and the failure more recently to take any interest in or to respond to the Alston Report – undermines one’s faith in the party’s intention and the ability of the present leadership to tackle poverty in the UK.
“the overall rise in child poverty since 2004-05 has been most concentrated on children of one-earner couples, whose real earnings have fallen.”
The treatment of one-earner couples is the major difference in impact between a UBI and our current policy of increasing UC.
@Peter Martin. No, we aren’t wanting to use the benefits system to top up low wages: you misunderstand. The increases in the National Living Wage are welcome, as are the increases in pay for many workers brought in by the new government. But Universal Credit is a right as I see it that is to ensure that people of working age are assured of some income to live on whatever their employment situation may be, just as people of pensionable age are assured of some income to live on through the basic pension. And the difficulty of Universal Credit and the related benefits is that they are just set too low, and with too many restrictions, to ensure a reasonable standard of living if people have to fall back on them when they are unable to work, or work enough to ensure they are earning enough. The beauty of our Guaranteed Basic Income policy is that it should begin by making sure the UC level is raised to the amount think-tanks like the Joseph Rowntree Foundation say is necessary for that reasonable standard of living, but then be developed to prevent deep poverty and destitution. That can be managed within a decade, which we hope the public may help us to press this new government to accept.
@ Peter Chambers. That is a wonderful summary, I think, Peter – that we should aim for a thriving nation rather than a neo-liberal colony! It is something we need to press on our own economics spokespeople and our leader now, to ensure that we can provide the reasoning that is lacking so far in the new government.
I was struck by an article in The Observer of a week ago, where the author, Sonia Sodha, summarised that “one in three British children now live in relative poverty, and one in six families are affected by food insecurity”, and demanded that the Chancellor act on child poverty, “For if a Labour government does not see its core mission as trying to improve the lives of some of our poorest children in good economic times or bad, what, then, is it really for?” We must hope that the new government does act as Sonia asks, but we must ensure that in any case the Liberal Democrats be soon identified as The party committed to fighting poverty in our country, and expecting public backing.
@Jenny Barnes. Regarding carbon capture, I am not qualified to comment on the science behind CCS, although clearly government advisors are happy with it, but I must call out the canard that the purpose of carbon capture is to prolong the life of the fossil fuel industry, a myth perpetuated by the Green Party. What ever we think of “Big Oil”, people will use fossil fuels for as long as it is economically rational to do so, in other words while oil and gas and the energy they produce are cheaper than the (renewable) alternatives. That is why investment in renewables and nuclear is so vital. If the costs of carbon capture are borne by the oil/gas company, then that increases the unit cost of production and pushes up their break even point. So, all other things being equal (which they rarely are) carbon capture makes it more difficult for oil companies, not easier.
@ Katharine,
There’s no misunderstanding. If we do include the mathematically zero case we can say your proposed Guaranteed Basic Income Policy is a way of topping up the wages of the lower paid.
I sometimes wonder if Lib Dems talk to people outside the political bubble and ask them what they think should be done. The working classes are often the toughest to convince that even those who are out of work for any length of time should be guaranteed anything at all.
It’s just about possible for those with no job but they are rightly going to baulk at subsidising the wages of those who should be paid a living wage by their employer. I doubt they will see “the beauty” of your GBI once they understand what it means. At the moment you’d be hard put to find anyone at random who does.
A floor could be set for all wages by the State offering a guaranteed job at a set living wage. So the big supermarkets will either have to go out of business or pay a living wage to those who stack their shelves. I suspect it will be the latter. If you said that is what you were going to do you’d still have to explain how it worked but generally speaking people are fine with the idea that everyone should get properly paid for the work they do.
They aren’t fine with everyone subsidising the wages of pizza delivery workers.
https://pavlina-tcherneva.net/job-guarantee-faq/
Thanks, Peter, but you are not allowing for the single parent or person not yet near retirement age who has to look after a parent in declining health – examples of people who may only be able to work part-time or in insecure irregular work close to home, and so have little chance of a decent regular income. By all means increase the minimum National Living Wage if you will, and ensure that employers pay it. But the job opportunities may be limited anyway today for your average young person in a world of high tech and A.I. Creativity and artistry may need to be better valued in future, along with caring for the planet and for each other.
@ Katharine,
Carers allowances, Child allowances and maybe others too can be replaced by a number of paid hours in a Job Guarantee program. This would apply to those of working age. This could also apply to training and educational programs too. A number of hours could be allocated to trainees and students, subject to certain agreed conditions.
The theory that the robots are coming to take our jobs has been around for as long as I can remember. It’s still not easy to find an electrician when we need one though! If it ever does become a problem we should share out the available work by reducing the working week and increasing the length of our holidays.
Peter Martin,
The public ‘won’t, rightly or wrongly, be in favour of a general increase in benefits to the unemployed’ (5th Oct 9.01am)
I question that this applies to a large majority of the public following Covid when it was generally recognised that Universal Credit was too low. Even the Conservative Government recognised this by temporary increasing Universal Credit by £20 a week.
There are 1.79 million people registered unemployed. If the number was less than one million with few people being registered for longer than a year, I would expect there would be less resistance to giving unemployed people enough so they do not have to live in poverty. This is why it is important to have the economic aim of full employment.
(6th Oct 11.36am & 7th Oct 12.09am) With the increase in the National Living Wage, I would expect that the amount of benefit paid to people in work has decreased substantially. With most of it being paid to those not in full time employment. A person has only to work more than 12.5 hours on the NLW to earn more than £142.52 a week (the amount a couple receives on Universal Credit).
If this UC rate was increased to £250 a week then a person would need to work just over 21.85 hours a week to earn more on the NLW. If the National Living Wage was £12.01 an hour then a single person working 20.6 hours would receive no Universal Credit if it was set at the deep poverty level of £136 a week.
For deep poverty rates by family type see JRF Poverty 2024 Report p 147 https://www.jrf.org.uk/uk-poverty-2024-the-essential-guide-to-understanding-poverty-in-the-uk.
Peter Martin,
The number of hours of work a person would have to work on the National Living Wage to earn the amount they receive on Universal Credit depends on how much they receive. A single person would need to work 7.94 hours and a person in a couple would need to work 12.5 hours. Under your proposed guaranteed job scheme would you expect people to work different hours depending on their need?
If every one of the 1.79 million people registered unemployed were to work 30 hours a week at the NLW this would cost over £31.9 billion; if they worked 35 hours at the current Living Wage of £12 an hour this would cost over £39 billion. Also, there would still be a need for some of these people to receive more than this income to pay for their housing costs.
@ Michael BG,
You’re omitting, in your analysis, the economic benefits in providing jobs to those who need them. The ££ you mention in your calculations are only worth something because someone somewhere is working to provide things to buy with them. Unemployment and underemployment are economic avoidable real costs. The un/underemployed aren’t producing much. They can easily drift into lives of crime which imposes lots of additional costs on society. The mainstream know this as well as anyone so why do they allow it?
The way the system works at the moment is to create a pool of unemployed and underemployed to create a brake against inflation. Google (NAIRU). Handing out more money without asking for anything in return, as seems to be the Lib Dem approach, won’t work because it is short circuiting the system. The whole point of the NAIRU isn’t to actually keep anyone deliberately unemployed. It’s to keep them poor so they are more likely to accept jobs on low wages.
Short circuiting a bad system is fine providing you are suggesting something better to take its place. Lib Dems aren’t doing that though.
@Michael. Asking a single person to work 7.94 hours a week (if they are able) in order to earn the money they are being given by the state doesn’t seem very onerous. I really don’t understand why anyone would object to that. It also doesn’t seem unreasonable to me that, if someone wants the state to give them more money, they should be asked to work proportionately longer in return (obviously up to a maximum no more than a full time working week).
When comparing costs of GBI/UC vs. guaranteed job, remember the situation isn’t comparable because a person in a guaranteed job is (if the scheme is well managed) presumably generating wealth with which their salary can be paid, whereas if someone is being given money to not do anything, then there is no possible source of that money other than using taxes to confiscate it from other people’s earnings.
Peter Martin and Simon R. This virtuous society you envisage in which almost everyone of working age has a job suitable for them and little actual need of welfare benefits can’t exist. Life in our society is complicated and messy. Family circumstances can change rapidly – an example I know is of a family where the parent of a child with an (all too common now) continuing though minor mental health problem suddenly has to give up a week’s paid work to look after the child in a crisis. Or when a person still of working age falls ill themselves, or has to look after an ageing family member, consistent work patterns become impossible. Costs too aren’t predictable, as the washing machine or the car breaks down, and the householder partly dependent on benefits suddenly has to find another bit of a paying job. I think there are far more strugglers than skivers in our society, so thank heaven for the welfare safety net, and as our party rightly says, government must make the back-up sufficient.
TIn Social Democrat Sweden you are simply not allowed to remain unemployed for long. The state provides work for unemployed people instead of handing out welfare help. No work, no money.
Of course, welfare payments never have been something for nothing. Unemployed people have paid NI to cover them in the event of unemployment, so it’s simply not true that they are being subsidised by people in work.
I actually think that requiring people to work if they can is a good idea. OK, we should take out of the equation the moderately small number of people who really can’t work and make sure they have a decent basic income. The Tories (and Labour) won’t do this because they are wedded to old ideas about idleness/laziness.
There have been good ideas about how to get long term unemployed back to work, like providing a system where they are picked up each morning and taken to work for a number of months until they get used to working again, but those initiatives have been stifled by successive Tory governments.
To introduce a UBI or GBI you have first to convince people to look at the whole idea of work differently and to convince the wider public that a basic income for all, regardless of work status is acceptable. My experience of door knocking in the working class areas of Leeds has persuaded me that it’s going to be a tough sell.
@Mick Taylor
“The state provides work for unemployed people instead of handing out welfare help”
Does the state just say ‘go and do it’ or does it actually try to match jobs to people capable of doing them?
I always thought that the point of unemployment benefits was to stabilise the economy. So that if part of the economy is no longer employing people – like primary steel production for example – then the rest of the economy does not take a full scale hit from the loss of the demand from those workers.
“people will use fossil fuels for as long as it is economically rational to do so”
Fossil fuels are widely subsidised and are rarely paying their externalities – the CO2 emitted should be charged for – and roughly speaking for every litre of diesel burnt you get 3 kilos of CO2. There are no sensible alternatives to diesel for many transport and heavy industry requirements, nor for kerosene as aviation jet fuel. And we notice that Exxon is forewarning of a huge investment requirement to maintain – let alone increase by the usual 2%pa – our fossil fuel consumption.
https://corporate.exxonmobil.com/sustainability-and-reports/global-outlook/energy-supply
shows oil supply falling very rapidly without such investment.
And airbus and boeing have around 15,000 passenger jets on order.
Non-Conformistradical. The Swedish government provides jobs for the unemployed after a certain period of unemployment (maybe 6 months). It doesn’t match people to vacancies as far as I know.
Peter Martin,
Indeed, if the government paid the unemployed more this would create extra demand in the economy. And if the unemployed worked this is likely to increase GDP.
The Liberal Democrat aim to ensure no one is living in poverty would destroy your view of NAIRU (non-accelerating inflation rate of unemployment) where you say the point is ‘to keep them (the unemployed) poor so they are more likely to accept jobs on low wages’.
However, you have ignored a major part of what I believe the government should do – pursue economic policies to get full employment which would mean fewer than one million would be unemployed and very few would be long-term unemployed and most of the unemployed would really just be between jobs and will get a job within the year.
Simon R,
Unemployed people need some time to look for work. Job Centres used to say that looking for a job is a full-time job. If a person was required to work for their benefit, they would need a lot more to cover the extra costs of being in work. However, I hope that no Liberal Democrat Conference would agree a work-fare scheme with its implied element of punishment for being unemployed as the work demanded for benefits is not likely to be in areas that the unemployed would choose to do.
The money people receive in a Guaranteed Job is paid by the state and not by the employer, therefore these jobs will not generate much extra wealth. Any Job Guarantee Scheme must not be a way for employers to get cheap labour. I support Job Guarantees. I managed to get included in the A Fairer, Greener, More Caring Society motion (F24) passed at our 2021 Autumn Conference ‘and introduce a green jobs guarantee, offering a well-paying green job to anyone who wants one’ (as well as ‘and providing training courses free to those not in work via a training guarantee scheme’). However, Guaranteed Jobs have to be voluntary not compulsory.
@ Michael
I agree guaranteed jobs should be voluntary and they should be properly paid. So these wouldn’t be workfare.
The emphasis would be on the young to start with. Labour previously had a policy of guaranteed jobs for young people who’d been out of work for a year or more. It has to be a priority to get them out of a rut and show them that they can make a useful contribution to society.
There should be a large element of training involved too.
@Michael; You seem to be making a lot of assumptions about how a guaranteed job scheme would work, which don’t match anything either I or Peter have claimed. The kind of scheme I would envisage would involve the Government offering the individual a choice of jobs based on preferences the person expresses for what kind of work they’d prefer to be doing. And they would be paid at at least the minimum wage for the hours worked. So not really workfare at all – more like a genuine guaranteed job. Your objection about people needing time to look for work seems strange to me: The vast majority of the population, if they don’t like their job and want to change jobs, seem to manage to look for vacancies while still working at their current job. I myself have done that a number of times.
@Michael BG “ Unemployed people need some time to look for work. Job Centres used to say that looking for a job is a full-time job.”
From my experience, Job Centres made looking for a job a full-time job, through the daft metric of number of job applications made in each reporting period. In my case, the benefit imposed hoops got in the way of meaningful job hunting. By switching to self employed and working families tax credits, ie. Deregistering as unemployed, and thus freeing myself from the JC madness, I was able to get a business off the ground…
Peter Msrtin,
I am glad we agree that guaranteed jobs should be voluntary.
I am not convinced that those of a particular age should be a priority, I would start in the region with the highest level of unemployment which in June was the East Midlands followed by the North West and the West Midlands. The highest rate of inactivity region is Wales (https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/regionallabourmarket/june2024 ).
I agree that for the young there should be a large element of training involved.
Simon R,
The scheme you see in your latest comment is different from the one implied in your earlier comment. But you have not clearly stated that the kind of scheme you want would be voluntary. I assume you are saying that the unemployed person will not have to join a scheme if there is nothing meeting their preferences. Perhaps what we each want to see in a Job Guarantee Scheme is not too far apart.
@Michael: Yes I would expect that in a reasonable job guarantee scheme the Government would pay wages in lieu if they are unable to find a job that meets a person’s preferences for the kind of work they want to do (but the person would have to be reasonable with their preferences).
I think the fundamental difference between us is that you (and Katharine) appear to be basing your proposals on an assumption that the state owes everyone a living and no expectations at all should be placed on the person being provided a living by the state. Whereas I see it as being more a two-way thing: What we should be aiming to provide for everyone is the opportunity to participate in society and to earn a decent living by contributing to the community.
@ Michael BG @ Simon R,
You might be interested in this TUC document showing how a JG might work. It’s well short of a full JG in the MMT sense but it could be a useful start in that direction.
The involvement of the TUC would be useful to rebuff any accusations from the left that this would be ‘workfare’. The right would probably baulk at simply increasing benefits for young people but would be hard pressed to find fault with this. Labour, though, have quietly dropped it. Lib Dems could pick it up again and at the same time demonstrate they aren’t anti-union by working with the TUC to develop the policy.
https://www.tuc.org.uk/research-analysis/reports/new-plan-jobs-why-we-need-new-jobs-guarantee
@ Peter Martin, @Simon R. That has been a useful discussion between you and Michael BG about job guarantee schemes. I expect, Peter, our party could indeed build on the TUC ideas as you helpfully suggest, while advancing our own policy to focus on ‘green’ jobs, and taking into account strong regional needs as well as the particular position of young unemployed people.
However, Simon, our party does indeed believe the state must provide a basic living for all its citizens, as is already accepted in the case of pensioners. Yes, people of working age should be expected to try to find paid work and help boost the economy, and ‘full’ employment has been a continuing Liberal aim. But as William Beveridge agreed before the Second World War, the state must not leave anyone in complete destitution, and it is shocking now that there are people among us who are destitute today. And yes, before you ask, we cannot let non-citizens among us be destitute either, in the Liberal society we wish to build and are perhaps helping to create.
@Peter. Thanks, interesting document. Skimming through it, it seems very comprehensive on ideas for how the scheme could work from the POV of the claimant. Seems a bit less clear on how the Government finds the jobs to provide (which to be fair is also something I probably need to think more about).
@Katharine, saying ‘our party does indeed believe…’ sounds a bit absolute and exclusive. Maybe the majority of activists or the majority of members believe that, but it’s clearly not the whole party because stuff like GBI was excluded from the manifesto. Besides I’m pretty sure I’m part of the party and, while I’d love to see poverty eradicated, I most certainly don’t believe the Government should unquestioningly pay anyone who wishes to do nothing.
Peter Martin,
Thank you for the link to the TUC Job Guarantee Report. One of the aspects bothers me – the requirement that each guaranteed job has a community benefit. I am concerned whether this would limit the type of work that could be offered (with very few ‘white collar’ jobs being available). I would be interested to know what the community benefits were of the jobs provided by private companies under the Future Jobs Fund scheme. I note the case that the TUC makes for the level of pay being at the real living wage rate rather than just an additional payment on top of the benefit people receives, while noting that under the Future Jobs Fund scheme the young people would have been paid at the lower minimum wage levels based on age.
It is interesting that the TUC believe that the level of benefits is far too low. One of the facts they include is the level of benefits as a percentage of average weekly earnings has decreased from 33% in the 1960s to 17% when benefits were temporary increased by £20 a week. Their emergency measures are more radical than party policy. Especially if they were saying Universal Credit for a single person should be increased to £260 a week in 2020/21 when it was £94.59 a week. This compares to our current aim of 50% of median earnings in a decade’s times which are currently £250 a week for a couple and £145 a week for a single person.
Simon R,
As Katharine has pointed out the party believes no one should live in poverty. And that Katharine and I believe that the government should run the economy so everyone who wants a job can have one and should provide the necessary support to assist people to keep their skills and develop new ones so they are employable. Just providing a level playing field so everyone has the ‘same opportunity’ as Conservatives used to want to provide, is just not enough.
Our Guarantee Basic Income is party policy agreed at our Spring 2023 Conference. While it is not named in our manifesto what it means is included – ‘ending deep poverty within a decade’ on page 51.
It has been party policy to scrap the sanctions regime since at least Autumn 2019 when we agreed to replace sanctions (after we have scrapped them) with incentives. This was in the manifesto (on page 52). Therefore, it is party policy that people can receive benefits without having to do anything apart from declare and provide evidence that they meet the financial conditions for the benefit. I do wonder if we might include as well that if a person wants to receive working-age benefits they have to meet other conditions, such as not being well enough to work, or declaring every two weeks that they are unemployed and available for work. (These last ones I think were the requirements for unemployment benefit before 1996 and the introduction of Jobseekers Allowance.)
@ Michael BG,
There will always be aspects of a detailed proposal, such as the TUCs Job Guarantee scheme, that Lib Dems might consider should be changed or improved. However, these could be discussed by all. There’ll be minor disagreements already in the TUC and possibly more significant disagreements in the LIb Dems. Still nothing will happen until someone makes a decision to make it happen.
The advantage of working with the TUC is that they won’t want to put in some effort in developing a policy only to see it totally ignored when election manifestos are written. There’s no point in passing resolutions at party conferences if this is going to be the end of the line.
“As Katharine has pointed out the party believes no one should live in poverty.”
The snag is that our current system depends on it. It’s a disciplinary measure to keep us all in line. If we don’t go to work …….
It was good to see our Leader put a question about youth mobility in Europe in PMQs yesterday, and to read of further questions usefully raised by two of our women MPs. as Caron has reported. But Ed’s question did not raise a flicker of interest from the Media reporting on PMQs. I am suggesting he should raise the problem of the cost of living in another session this month, and specifically ask how Keir Starmer proposes to help ordinary people cope with the rising cost of heating their homes this winter. Will he give extra help as the previous government did?
The context is that it is now being generally understood that the Chancellor will feel able to borrow more in the Autumn Budget to pay for structural investments. However, we should surely ask her to find the funds to support so many of the poorest citizens with the crippling cost of keeping warm this winter.
@ Katharine,
” But Ed’s question (on EU youth mobility) did not raise a flicker of interest from the Media reporting on PMQs.”
It wouldn’t. Ed must have no concept of the public mood if he ever thought otherwise.
I am suggesting he should raise the problem of the cost of living in another session this month
He should have done this already but better late than never I suppose. Rachel Reeves’ budget is scheduled for the 30th so things are hotting up!
She’s got herself caught in a bind of her own making. One of her “iron clad fiscal rules” is that Government current spending should be financed by taxation receipts whereas investment or capital spending can be financed by “borrowing”. Although what is actually termed borrowing isn’t really that. It’s just a swap of one kind of government IOU for another. So according to her own rule she’ll need to raise taxes. This a highly ironic. The sole reason for having nonsensical fiscal rules in the first place was to convince the electorate that Labour could be trusted not to have to raise taxes.
Of course, if she overdoes any type of spending, current or capital, relative to the levels of taxation there could be an inflation risk. If she needs to either cut spending or raise taxes to reduce inflation then this is what she should say. Instead she chooses to insult our intelligence with drivel about “black holes”
I have now written to Sir Ed to request him at a PMQs this month to ask Sir Keir what his Chancellor will be doing to help people with the Cost of Living crisis this coming winter, and I hope fellow members may add their voices to this.
Peter, thank you for explaining the economic bind which the Chancellor seems to be in. It may not be easy for her to find money to help people with their winter fuel bills from current expenditure, but now they have cut the Winter Fuel Allowance already to cause hardship to many pensioners, they should surely consider some alleviation of the cost to consumers, just as the Tories managed before them.