Scarcity on the surface
When I sat down for lunch with a local council leader one afternoon, in a café adjacent to a YMCA, one of the first things we discussed was capacity. The ability of the state to serve its people, to foster a society where they can access social mobility, and to give them support when they need it. As I sat down and talked with them, drinking my “woke” chai latte, I understood some of the problems we faced in Somerset and it was upsetting. Children unable to access SEND schooling, or falling out of education. People waiting many months for affordable housing, forced to rent privately. Elderly people living in precarity to afford social care.
Often we think about this country and the state that it is in, and all we can feel is despair; which is completely understandable. The canyon between earnings and living costs is ever-growing. Services keep being cut year-on-year, and there’s no money to restore them in real terms. Councils being forced to tackle potholes, graffiti, and overgrown vegetation like a game of whack-a-mole – I blame Eric Pickles in particular.
In 2010, when we came into government, the economic outlook was not good. We had just faced a global crisis of horrifying proportions, and as such policy programmes were devised. The Conservatives wanted to reduce a “structural deficit” through austerity, so that we could “live within our means”. They believed if they could cut debt as a proportion of GDP, through cutting expenditure, they could close a gap – but look at how much wider it has become.
One evening I was speaking to my Local Party chair, and she informed me it would cost four billion pounds to restore SEND provision funding in real terms. To put that into perspective, that is 18% of Rachel Reeves’ fiscal headroom (£22bn) from the Autumn Budget. Now extrapolate that to the rest of the state. Capacity wasn’t just “cut” in the immediacy of austerity, but it was left to wither. And the British people have paid the price; through fiscal drag, anaemic wage growth, a quicksand poverty line, and the persistent anxiety of precarity.
So what does that have to do with my latte in a YMCA-adjacent café? Well, this wasn’t any café; it supports our community, residents in the YMCA, and even helps people out of precarity. The Purple Spoon provides freezer meals, free to anyone who needs them; no questions asked. It is doing something that is emblematic of social liberal philosophy.
Many decades ago, in a different world, liberals envisioned a state that would support people to live. Not through paternalism, but through liberty through security. Despite what some say, welfare isn’t about paying people to “do nothing”, but two things: investing in people and supporting them. Yet Britain has stopped doing the former, and does the latter quite poorly.
Things can get better
But as I sat there, talking to this council leader and drinking that coffee, despair suddenly turned into hope. Not a naive, euphoric lightbulb moment, but a way forward. We can’t go back to where we were before 2008, but we can choose a better trajectory than managed decline. I understand our problems aren’t simple, but pragmatism and pessimism aren’t the same.
When we left the European Union we forfeited so much and gained so little. To put that into perspective, the OBR estimates we’ve incurred £100 billion a year in structural losses. Money that we could invest in not just infrastructure, or services, but people. People who struggle due to disability or illness, or are single parents, or even asylum seekers who are literally prevented from contribution. I’m not saying we should force people to work, but that we should support people so they have the bandwidth and security to contribute.
I’m not going to tell you exactly how we should rejoin the Single Market and/or Customs Union, even if I think we should, because I’m not an expert on trade. However, what I will say is that if we wish to live in a society where children don’t go to bed hungry or cold, where people feel unsafe walking down the street, or single parents don’t have to visit foodbanks, we need to invest in people.
Precarity is what Reform are betting on; and they’ll divest from what our peers have to offer. So it’s time we set out an alternative vision, not just a “fair deal”, but one that meets people where they are and builds towards a Britain where things simply work.
* Jack Carter is the Co-Accessibility, Diversity, and Inclusion Officer of the Young Liberals, a Computing student with an interest in social and economic policy, mental health, and digital fields.
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7 Comments
“The canyon between earnings and living costs is ever-growing”
Forgive me pointing out that while there is a gap between the rate of growth of average wages and the rate of growth in average prices, the gap has been increasing in a good way over the past few years – average wages have been increasing more quickly than average prices. At the same time, the national minimum wage has been increasing at a faster rate than the inflation rate so lower paid workers are also better off in real terms than before. And let’s not forget that the triple lock means that state pensioners always see their pensions increase by no less than the rate of inflation and usually more.
Having said all that, I realise that many in our society need more help due to them having to struggle with social care costs, or other circumstances that impact on their lives, but the overall picture is that most people are seeing their living standards increase…so it’s not all bad news.
It depends how you define the level of earnings. Mean earnings for the employed has undoubtedly been rising. The employed have been declining as a proportion of the population. The top and the bottom of the earnings scale have been rising compared to the middle. Net earnings have been falling compared to gross earnings.
On the other side of the balance sheet, the things poor people buy have been rising in price faster than the things rich people buy. It all results in most people finding it dificult to reconcile the headline statistics with their lived experience.
@Peter Davies
I agree with everything you say except your conclusion that ‘most’ people are finding it difficult to reconcile the headline statistics with their lived experience. I would agree with ‘many’ but not most.
At a time when three quarters of those of working age are in employment, when wages, generally, have been rising faster than prices, when the minimum wage has been rising faster than prices, and when state pensioners are protected by the triple lock, I would need some empirical rather than anecdotal evidence to justify a claim that the majority are experiencing prices rising faster than their incomes.
“They believed if they could cut debt as a proportion of GDP, through cutting expenditure, they could close a gap – but look at how much wider it has become.”
It’s certainly politically convenient to hang this narrative around the Tories’ necks, but it’s important that we do not fool ourselves. It was our project too.
The attached graph shows that at the start of the coalition the debt:GDP ratio was about 70% and rising. At the start of the 2010 tax year it was 64.4% and and at the end of the 2015 tax year it was 81.1%. It hit a peak at 94.1% at the end of the 2021 tax year and has (more or less) flatlined since.
It would be easy to say the coalition failed in its aims but:
1 it takes time to turn the tanker round;
2 the economic shocks have been huge: the great crash, Brexit, Covid, Ukraine;
3 the coalition’s public spending was was roughly in line with that promised by Labour in their 2015 manifesto.
4 whatever you think of its political priorities, we had a stable government that did a bit of liberal good. Remember them?
https://www.statista.com/statistics/282841/debt-as-gdp-uk/?srsltid=AfmBOoqUgVJwyiQ5E6v1cZU5B7BTPucvdvafZBRbWjxuDb3OY4Z453a8
“welfare isn’t about paying people to “do nothing”, but two things: investing in people……..”
How is exactly is welfare “investing” in people please? Clearly people absolutely must be supported.
“{The Tories} believed if they could cut debt as a proportion of GDP, through cutting expenditure, they could close a gap….
It wasn’t just the Tories. Government spends money into the economy and removes it in taxation. The less is spent in the less is available to be removed, the more sluggish the economy becomes and the lower government revenues will fall. Austerity acts as an effective counter inflation policy, and there will be times when this is justified, but it can’t be relied upon to reduce government deficits.
There are other recent factors such as the spending to support the economy during Covid emergency. The deficit rose because naturally people weren’t spending so much during the Pandemic. Otherwise the extra spending could well have showed up as an immediate increase in inflation.
The inflation occurred later when many started spending their accumulated savings.
“welfare isn’t about paying people to “do nothing”…..”
It often is. Of course this is OK if people are sick. But what about those who aren’t? The public mood isn’t with LibDems on the desirability of increasing social payments without anything being asked in return.
Most of the in -work poverty could be reduced if wages were increased to a living wage. The onus should be on employers, rather than the taxpayer, to ensure their workers receive a genuine living wage.
The more enlightened of the 19th century industrialists understood this when they set up ‘model’ towns and villages for their employees.
In 2010, when we came into government, the economic outlook was not good. […] The Conservatives wanted to reduce a “structural deficit” through austerity, so that we could “live within our means”.
Not the (coalition) government’s choice. The UK was put into Excessive Deficit Procedure in July 2008 and we didn’t regain control of our budget until December 2017.
‘What were the EU’s requirements for correcting the Excessive Deficit as applied to the UK between 2008 and 2017?’:
https://grok.com/share/bGVnYWN5_0324c8f5-3183-465b-9d59-5d751b16af7d
They believed if they could cut debt as a proportion of GDP, through cutting expenditure, they could close a gap – but look at how much wider it has become.
Due to the response to the pandemic which was supported by all major parties. If the UK was still in the EU today we would be back in EDP and required to impose austerity measures again.