Last week, we learned that inflation had been safely steered back to 2 per cent, precisely in line with the Bank of England target. Everything, then, is back under control. We can safely draw a line under the “cost-of-living crisis”. Right? Sadly, nothing could be further from the truth.
What matters for securing the absolute basics in life—food, shelter, heat and so on—is not a general price level (which is also affected by the prices of luxury holidays, fancy restaurants and the bill for domestic staff) but the costs of those very necessities. The rise in private rents is sharp and ongoing; they continue to climb not by 2 per cent, but nearly 9 per cent a year. Energy bills may now be falling, but from such a ludicrous peak that they are still up around 60 per cent on three years ago. Food, meanwhile, is up by around 30 per cent over the same period.
Set all this against what’s happened to incomes at the bottom end of the scale, and the gap is stark. For poorer families, benefits are a source of income, and for the very poorest often the only source of income. When, after an extremely painful delay, headline benefit rates finally caught up with general inflation in April this year, the rise over the period from April 2021 was merely 20 per cent—far lower than the increase in the price of food, shelter or fuel. So keeping body and soul together is still a good deal more difficult than it used to be: the cost of surviving crisis continues.
And yet the very idea of a cost-of-living “crisis” was, arguably, always a misnomer. It is the nature of crises to culminate in a particular moment, but the hardship laid bare in the last couple of years always had less to do with a passing inflationary moment than a stubborn—and enduring—squeeze on the lowest incomes. In medical terms, we are not dealing with an acute emergency, but the sort of chronic condition that has long dogged, and shortened, life in large parts of the United States
Let’s recall a few facts. Rough sleeping in England is up by 60 per cent over the last two years, and the number of families stuck in (reliably terrible) temporary accommodation has doubled since 2010. Government statisticians have recently started publishing data on foodbanks; this plank of the survival system of poorer people has simply become too big for them to ignore. The official tally of people whose households had turned to foodbanks in the last 12 months stands at 2.3m. In the same statisticians’ numbing bureaucratic parlance, “very low food security” now stands at 3.7m, a total that has shot up by a full two-thirds in the latest year alone. These numbers are on the same scale as the notorious “three million unemployed” which was seen as the defining blight on British society in the 1980s. Our unfolding decade deserves to be damned as “the Hungry Twenties.”
The consequences of all this hardship for broader society have become increasingly stark over the past year. Both official and retail industry figures are recording an astonishing surge in shoplifting, something industry insiders have linked to a black market for food that has burgeoned during the big squeeze. Still darker indicators flash in relation to health. British progress on longevity has been faltering for a while, but in the last couple of years things have gone into outright reverse. According to the Office for National Statistics, life expectancy at birth for 2020/22 is “back to the same level as 2010 to 2012 for females” and “slightly below” that benchmark for males—a whole decade, in other words, of zero or negative progress.
This isn’t normal. Barring war or revolutionary convulsions, lives have always got longer, not shorter, in industrial societies. Admittedly, the pandemic colours the recent picture, but the slide started earlier. Even before the virus, we saw women specifically in poorer postcodes beginning to die earlier. Then, when Covid came, the (mostly male) deaths it caused piled up disproportionately in the same poor neighbourhoods. Moreover, the perennial inequality in healthy life expectancy has grown. “The most deprived areas of England,” government demographers report, registered “a significant decrease” on this count in the second half of the 2010s. Looking ahead to 2040 (and comparing against a 2019 baseline), analysts at Liverpool University and the Health Foundation foresee an increase of some 700,000 in the number of working-age Britons living with a major long-term illness, overwhelmingly accounted for by a further rocketing of already-heavy rates of chronic pain, diabetes and anxiety/depression in poorer communities. Irrespective of any moral concern about poverty, or indeed basic humanity, purely in terms of employment and productivity that sounds like a very expensive problem in the making.
Will a new, in all likelihood Labour, government make much difference? In some ways, it might well. Under its banner of “securonomics”, Labour will substantially further the now well-established cross-party tide towards stronger interventions in poverty-inducing markets. George Osborne, remember, started the recent process of ramping up the minimum wage the Tories once opposed; Theresa May commissioned the Taylor review to explore insecurities in the gig economy; Michael Gove tried (and ultimately failed) to banish no-fault evictions; and, Liz Truss (of all people) introduced an energy price guarantee.
Keir Starmer will go further on most of these fronts. Labour would, for example, not just talk about banning no-fault evictions, but actually do so. And, even if it shrinks from that outright ban on zero-hour contracts (for which there is a powerful argument), the party is firmly committed to meaningfully strengthening worker protections against the vicissitudes of unreliable shifts. If it can do all this and also engineer the stronger economic growth it promises, then the “working people” it talks endlessly about will be more in demand and in a stronger negotiating position to push for further improvements of terms and conditions.
What’s much less clear, however, is whether Labour will reinforce the original and surest form of “securonomics”—namely, social security. I recently wrote about the party’s failure to challenge the government’s dehumanising two-child policy and while it has since been a relief to hear Starmer half-acknowledging the force of the argument for scrapping it, he’s still a long way off from committing to action. The truth is that this is only the most grievous of the many holes that years of austerity have torn in the social safety net. Rates of basic benefits are now lower relative to wages than at any time since the inception of the Beveridge settlement, which established the welfare state in the 1940s. Basic protection against unemployment in the UK are also the lowest in the OECD.
Without adequate basic benefits, millions of Britons are standing on a trapdoor to poverty; it only takes a redundancy, injury or divorce for them to fall through it. This is the single most important cause of the hardship so evident across the country. And yet, hopes of addressing it now rest on a single line in the Starmer manifesto: “Labour is committed to reviewing Universal Credit so that it makes work pay and tackles poverty.”
It is hardly a transformational promise. But if the political will is there, a review could open the door to meaningful change. Last year I held the pen on the Resolution Foundation’s strategy for ending stagnation, which explained in detail how, with even moderate growth, UK demographics leave plenty of scope for steadily raising working-age benefits back towards reasonable levels without increasing the burden of welfare on the economy. It is time to banish the lie that basic decency is a luxury we can no longer afford.
We can discuss different elements of deprivation—cold, squalor, hunger and so on—and debate different elements of the solution. In the end, however, we are talking about one problem: a marauding giant of Want runs across the entire terrain. The biggest question for our generation, as for William Beveridge and the generation that came through the war, is once again how to summon the political will in order to slay it.
Tom Clark’s edited collection Broke: Fixing Britain’s Poverty Crisis (Biteback) is just out in updated paperback
