We are told that unemployment is at a 40 year low and yet demand for food banks in South Leeds has never been higher. How can this be? There are lots of reasons, so let’s look at each of them in turn.
First, it’s the result of benefit cuts, sanctions and family crises. People suddenly find themselves without any money. And it’s an even bigger problem in the school holidays when children aren’t getting a daily free school meal.
Secondly, look at what’s happened to wages in the last decade. According to the Resolution Foundation millions of ‘just about managing’ families are no better off today than those in 2003. Incomes at the lower end of the pay scale have stagnated.
Some people are having to take on more than one job to manage and if you’re on a zero hours contract then you can never be sure from week to week how many hours you will work and therefore how much you will get paid.
Meanwhile, those at the very top end of the pay scale have seen their incomes rise significantly. The latest report from the High Pay Centre found that the average pay packet for the chief executives of the biggest companies in the UK is now £3.9 million a year, up 11% from last year.
And if that wasn’t bad enough, only 34 of those companies pay a living wage to all their staff.
And then there’s the cost of living.
Prices have gone up, largely as a result of the fall in the value of the pound since the Brexit referendum. This makes imports more expensive and that feeds its way into the weekly shopping basket.
And when it comes to finding somewhere to live, rents are up too. The housing charity Shelter say that rents across England have risen 60% faster than wages since 2011, and in Leeds, rents have risen 13% since then while wages have only increased by 11%.
When you look at all these figures, what they mean for many people is pretty clear. Their incomes are simply not keeping pace with costs and that’s why there is a problem.
Our food banks do a vital job in helping people and families in need, but this will carry on until we tackle the underlying problems of low wages and the way the benefit system works.
One idea is to set a maximum pay ratio in companies, for example, that are bidding for public contracts. If you did that, then as the pay of the boss went up so would everyone else’s.
Most of all, however, we need an economy that is growing, encouraging investment and creating jobs. And at the moment, the biggest risk to that is the uncertainty created by Brexit.
There’s been a lot of talk recently about leaving the EU – which we will do at the end of March next year – with No Deal. But the evidence from the papers that the Government has recently published is that this would be very damaging for the UK economy.
So what should we be doing? We need a deal that will enable friction-free trade with our largest, nearest and most important market – the other countries of the EU – to continue and which protects our services industries that make up 80% of our economy.
So instead of planning for the worst outcome, the Government should be trying to get the best for our country, but that will mean putting the national interest above anything else.