The House of Lords debated the Lord Chancellor’s spring statement on the economy in Grand Committee on 31st March 2022. The Bishop of Worcester spoke in the debate:
The Lord Bishop of Worcester: My Lords, I first put on record my appreciation of the good things the Chancellor announced in the Spring Statement. He had an extremely difficult job on his hands when preparing it. The aftermath of the pandemic made things difficult enough before the horrors unfolding in Ukraine came on to our screens. I do not envy him the immensely difficult balancing act he has to perform to ensure that the public finances do not suffer irrevocably while giving help to those facing an unprecedented squeeze on their finances.
I pay tribute to the good things announced in the Statement, particularly in providing help for the hard-pressed. Having said that, I agree with noble Lords about the need to do more on climate change. We cannot afford to take our eye off that particular ball—the most serious crisis of our times. I was moved by the experience related by archbishops of the Anglican Communion, who, as it happens, were all in Parliament this morning, particularly those whose provinces are already being devastated by the impacts of climate change.
I will concentrate on the difficulties faced by the most vulnerable in our society even before the pandemic and the war in Ukraine. The Church has been very active in seeking to alleviate poverty and everything associated with it since the crash of over 10 years ago. I draw attention to the establishment of food banks, which have already been mentioned, up and down the land and the brilliant work done by Christians Against Poverty among other agencies in civil society. The sad truth is that the problems facing people have remained great since 2010; in each survey carried out since then, the need for such agencies has not decreased or dipped at any point.
We have done our best over those years in the churches to respond to increasing need. A Church in Action survey over 2020-21 shows that 78% of Church of England parishes are running or actively supporting a food bank or related provision. This is a marked increase on previous surveys. In 2011, the equivalent was 33% of parishes; in 2015, this had increased to 66% actively supporting a food bank. Each survey has shown that support for food banks is widespread across all regions and communities, including rural and less-deprived areas. There are now not that many parishes not running a foodbank; a large number opened one during Covid despite the £20 uplift in universal credit.
In other words, during the period of austerity following 2010, churches and faith communities, among other institutions of civil society, stepped into the gap. My fear is that we are reaching saturation point on what remedial measures civil society can realistically take. As Martin Lewis, the economic commentator, memorably put it:
“We have a real absolute—not relative—poverty issue going to come in the UK, with food banks oversubscribed. Debt crisis agencies do not have any tools.”
The results of a Christians Against Poverty survey indicate that only 20% of adults feel prepared to deal with rising costs. Various groups, including the Children’s Society, have suggested that the increase in the household support fund offers only short-term, limited help to the most vulnerable—some of the most vulnerable in our society face a really terrible crisis. The Resolution Foundation has stated:
“Taking into account the measures announced by the Chancellor … in 2022-23 … a further 1.3 million people fall into absolute poverty … including 500,000 children—the first time Britain has seen such a rise in poverty outside of recessions.”
While it is clear that the measures announced in the Spring Statement and previously by the Chancellor on energy prices and other measures will help lower-income families, it is far from clear that they will compensate for price inflation. The fact is that they most likely will not. It is also the case is that while the increase in prices is universal, the support offered by these measures is not, and there will be vulnerable groups who will not feel their impact.
The Chancellor cannot be expected to solve all the problems of this country—we have heard about the necessity to keep the debt within a reasonable proportion, and we are facing these problems in common with others. However, it is important for us to acknowledge the extreme difficulties faced by the most vulnerable in our society and take cognisance of them. As I have suggested, pressure on civil society and its institutions is already great. I am proud of the way in which churches have reacted to the challenges facing the most vulnerable in our society. However, the consequence of the latest indications of increasing poverty will be a huge pressure on those institutions to step up and provide additional support to help more people through things such as food banks.
As I have intimated, I am nervous about whether we are reaching the limit of what agencies in civil society can realistically do. At the very least, I hope that the Minister might be willing to give an assurance of increased support for such agencies, including the churches, as we work together for the welfare of the most vulnerable in our society.
Extracts from the speeches that followed:
Lord Horam (Con): I acknowledge what the Chancellor has done to mitigate these tax increases, as was rightly pointed out by the noble Baroness, Lady Penn, in her excellent introduction and was mentioned by the right reverend Prelate the Bishop of Worcester. That has been worth while and important, but I am afraid it mitigated only a proportion of the tax increase that preceded it and it was not well targeted. The poor will suffer most. On this subject, I totally agree with the right reverend Prelate. He can be very proud of what the churches have done in the provision of food banks and so forth for the poor. As he pointed out, the extent to which voluntary civil society can deal with this is reaching its limit. We need the state to step in, in a major way, in the next few months.
Viscount Chandos (Lab): Lastly, how well are the Government using these revenues and resources? I hope the Minister and her officials will have read the debate last week in this Room on the Economic Affairs Committee’s report on universal credit, though her speech showed no sign of it. Last week, on the very day of the Spring Statement, every speaker, apart from the beleaguered noble Baroness, Lady Stedman-Scott, as the relevant Minister, deplored the failure of the Government to address the devastating poverty, distress and unfairness caused by the unreformed implementation of the Conservative Government’s universal credit policy. The Resolution Foundation, which I have already quoted, wrote last week:
“Cuts to income taxes have never been well targeted ways of helping the poor, but now we’ve got UC they’re useless.”
The right reverend Prelate the Bishop of Worcester has already referred to the projected increase by 1.3 million of those in poverty, of whom 500,000 would be children. That represents a 30% increase of those in poverty in the period from 2020-21 to 2025-26. More generally, as the Institute for Fiscal Studies has pointed out, there will be huge pressure on the budgets of spending departments as a result of the difference in the effect of the GDP deflator from that of CPI.
The Chancellor has made his choices. In doing so, I think he has demonstrated both his own personal priorities and those of the Government. I do not believe that is going to change until there is a change of Government.
Baroness Kramer (LD): We had so many speeches around these issues. The right reverend Prelate the Bishop of Worcester gave a warning that he fears we are reaching a saturation point in civic society being able to pick up a great deal of this pain. The noble Lord, Lord Turnbull, talked about, in effect, a new Poor Law. The noble Baroness, Lady Boycott, warned us that the degradation in people’s food spending has nutritional and health consequences, and indeed, broader consequences. The noble Lord, Lord Bird, reminded us that poverty is an issue and here we are increasing dramatically the numbers in absolute poverty, which needs a long-life-cycle set of responses. Frankly, this Budget does not begin to enter into that territory—and it is a Budget, not a Statement.
We on these Benches understand that times are not easy, and the fundamentals are poor. We have a serious shortage of working-age population. The dependency ratio has shot up to an unsustainable 57% and the OBR estimates the scarring effect of workforce shortages to be 1.2% to GDP. We had some discussion of those issues by the noble Lord, Lord Balfe. That is really crucial scarring, and it is not an issue that you can turn around, particularly with the Government’s current set of immigration policies.
Lord Tunnicliffe (Lab): The right reverend Prelate the Bishop of Worcester usefully brought out that not only do we have to worry about these absolutely crucial things such as climate change—thinking about our grandchildren and their children and what the world will be like unless our generation actually does something about it—but equally, as part of that, we have to keep vulnerable people in mind. The noble Lord, Lord Horam, used a word that is not around enough these days; he touched on the fundamental idea of fairness in the treatment of working people, and said rather flatly that the Chancellor has not done well.