Cost of Living Increases

Justin Madders Excerpts

Tuesday 25th April 2023 Commons Chamber

[Justin Madders (Ellesmere Port and Neston) (Lab)]

If wages had continued to increase at just their pre-2008 rate, workers would have been £233 a week better off last year than they are now, and that figure is expected to increase to £304 per week by 2027. There is a yawning chasm between what working people could have benefited from and what they are experiencing now. Imagine what the world would have been like if that wage rise had continued.

It is a staggering fact that average incomes will lag behind those in Poland by the end of the decade if we carry on as we are. Ours is not a poor country—we have one of the biggest economies in the world—but when so many of our citizens have to scrape from day to day just to make ends meet, we have to ask some fundamental questions about why it has gone so wrong. It seems pretty clear to me that the experiment with trickle-down economics has been conclusively proved to be a failure, that the Government can no longer be a bystander in our economic renewal, and that the economic shocks of the past 12 months could have been much more effectively mitigated.

Let us look at what is happening around the world. With his Inflation Reduction Act, President Biden is taking steps to prepare the United States for an extremely challenging future. We have nothing approaching that scale or that ambition, at least not from the Government Benches, but those of us on the Labour Benches do have ambition. We are ready to face the challenges of global competition and climate change; we are seeking to reduce our dependence on fragile international supply chains with our plans to buy, make and sell more in Britain; we will have a real go at funding the step change in home insulation that is needed for this year’s and every subsequent year’s energy bills; and we will end the chronic disease of low-paid, insecure employment.

It is pretty clear that we need to do more to improve people’s earnings in this country, and one way of doing that is to empower workers to negotiate their terms and conditions through sectoral collective bargaining. Wherever we look in the world, when trade unions are empowered to negotiate on behalf of their members, people’s earnings tend to be higher.

When I look at what my children and their generation are facing, I see their wages continuing to fall behind everyday costs, with endemic job insecurity and companies gaming the system so that they do have any rights, let alone the ability to get on and progress in their chosen fields. More and more of their wages go on meeting the basics of living, which puts into the realms of fantasy the idea that they might be able to save up for a home of their own one day, or even—heaven forbid—save for their retirement. That is not the future that I want for my children, or for anyone’s children. We have to do something to halt the country’s slide into mediocrity, where ambition is stymied before people even start because the way in which the economy is structured means that the bulk of the nation’s wealth never leaves the top rung.

We cannot go on like this, with people working harder but seeing their cash go less and less far so that it becomes a stretch even to pay for essentials, while their tax burden increases and public services continue to deteriorate. If we were still in Europe, we would be the sick man of it. We cannot keep asking people to pay more for less. Something has to change, and it should be the Government.