Bishop of St Albans speaks in a debate on the cost of living

On 9th June 2022, the Bishop of St Albans spoke in a debate on the escalating cost of living:

The Lord Bishop of St Albans: My Lords, I too want to thank the noble Lord, Lord Eatwell, for his excellent introduction to the debate. I was not going to say much about social capital. Like others, I was brought up on Robert Putnam’s Bowling Alone and reading his excellent work. I notice that the noble Lord’s analysis was very much on the economic aspect. From my perspective of having responsibility for over 400 churches across two counties, the voluntary aspect is also an important part of that work.

One of the things that I have observed over the last 40 years is that the decline in social capital is due to a whole lot of reasons, which we really ought to debate in this House, including things such as the Government’s attempts to professionalise volunteers. It has become increasingly difficult to find people to help. As an organisation that is running numerous food banks, debt advice centres, lunch clubs and breakfast clubs for children who are not going to get breakfast before school, we are very eager to be part of this, but it has got more difficult for us to deliver it. I must not stay on that too long, or I will be over my time.

The challenges we are facing are stark, starting with the massive increases in fuel and basic food costs. A Food Standards Agency survey has found that one in five people has recently either skipped or reduced the size of meals to reduce their costs. Our evidence coming in week by week at the food banks is that demand has grown massively. Nobody is engineering that; we are just getting the reports in week by week.

We do indeed need a strategy for the short and the long term. I think it is very good that the cost of living payment is going to be a welcome step to easing the pressure on those on the lowest incomes. I hope Her Majesty’s Government will look at other ways of giving immediate short-term benefits. Without that, there will be the most extraordinary crisis within a very short time.

Having said that, I want to concentrate on one other aspect of the long-term response. The cost of fuel has gone up at a time when there is a desperate need to reduce our carbon emissions. It is worrying to hear that some of the very carbon-productive forms of energy are likely to be extended when we are in a crisis. We need to think about whether some of this can come together in some new ways of thinking. Fortunately, we are not in the difficult position that, for example, Germany and some other neighbouring countries are in who are profoundly reliant on gas from Russia. Nevertheless, we are affected by markets across the world, and the war in Ukraine has revealed how vulnerable we are to fluctuations in gas and oil prices. If we had made much more progress in the past in renewables, we would not be in such a weak position today.

The grants provided by boiler upgrade schemes, which I think were referred to in Questions earlier today, will undoubtedly help in this regard, although it is going to be decades before we make sizeable inroads into that. However, at a time when families are struggling, it is questionable whether they are going to have the capital that they will need to make up the shortfall for that scheme. To make a success of the scheme, we will need further loans which will help people access that market.

Likewise, the urgent need to encourage the private adoption of solar photovoltaic panels to allow households and commercial buildings to generate their own energy will play a modest part in averting the economy’s vulnerability to fluctuations in fuel prices. There is a glaring incentive problem whereby it takes far too long for the average house or business to recoup their capital costs if they install these renewable forms of energy.

If the Government are to make the economy more resilient to better absorb future energy shocks, addressing this incentive problem will be crucial. There are various ways to address it. Of course, in the most extraordinary way, these huge hikes in the cost of fuel are in fact shortening the period over which you can then recoup the costs and begin to benefit from the installation of solar panels.

Another way to tackle this is to introduce legislation so that companies providing electricity are required to pay a much more realistic price for the surplus electricity that households sell back from their solar panels. Under the old feed-in tariff scheme, householders were receiving much more money back from their providers than they do now for their surplus energy. They now receive about one-10th of what they were receiving, depending on which provider you use. Therefore, electricity companies are making a much greater profit out of buying separate energy and selling it at a huge cost back to others. What consideration have Her Majesty’s Government given to imposing a minimum price to increase the income that householders receive back from that spare electricity, thereby incentivising people to bring in these forms of renewables much more quickly?

Hansard

Extracts from the speeches that followed:

Baroness Kramer (LD): Picking up on issues raised by the right reverend Prelate the Bishop of St Albans, according to the Food Foundation, nearly half the households on universal credit have experienced food insecurity in the past six months. This statistic really left me aghast—that almost one in 20 of all British households say that members of their household have gone a whole day without eating because they could not afford or get access to food. Of course, that feeds into the nutrition problem that the noble Viscount, Lord Stansgate, underscored.

No one has particularly mentioned those with mental health issues. Very sadly, this affects an increasing part of our community, given the impact of Covid. The Money and Mental Health Policy Institute has taken a deep look at this issue, and its results are shocking. It says that there are deep links between money and mental health and that:

“A greater share of people with mental health problems are in debt, and those debts are harder to manage”.

It also says that:

“The stakes are incredibly high, with strong connections between financial difficulties and suicidal thoughts or attempts”. (…)

(…) We have been asked to come up with ideas, and I have to say this is an area where I have to do a great deal more work. But I am interested in something that has not been raised at all here, which is the idea of basic minimum services. It strikes me as something really worth exploring, possibly with more potential than universal basic income, because it addresses the problems of the poorest. How much does it cost to have a roof over your head and decent food on your table, to be able to access health and the basics of a lifestyle? That is an area we have to explore.

It also leads me to think we need to rethink the way we structure public finances, because as we change society, we have such a narrow concept of what an investment is rather than day-to-day spending. To me, education is investment, not day-to-day spending, for example. The transition to a green agenda, which the right reverend Prelate the Bishop of St Albans raised, which may often look like day-to-day spending, is again more in the investment category and needs to be treated completely differently in public finances.

Lord Tunnicliffe (Lab): Earlier, the right reverend Prelate the Bishop of St Albans made a particularly powerful contribution about the challenges faced by many individuals and communities across our country. The cost of living crisis is at the forefront of our minds at present, and rightly so. Even with the energy measures announced by the Chancellor before Recess, that crisis is going nowhere. Energy and other costs will rise further in the coming months and that may require further interventions from the Treasury.

However, we must acknowledge that as well as putting household budgets under strain, the current economic situation is subjecting people to numerous other pressures: there are concerns that personal finances may be taking a toll on people’s mental health; it may impact on the frequency and quality of interactions with friends, family and neighbours; and it may change how people interact with civic processes and institutions or core public services. Addressing these issues and, in doing so, developing social capital is not straightforward at the best of times. It requires time, political will and appropriate funding. Few in this country would consider these to be the best of times.

Baroness Penn (Con): In addition to the two approaches of an independent monetary policy and responsible fiscal policy, there is also supply-side activism. The Government’s energy security strategy will, over the long term, reduce bills by increasing energy supply and improving energy efficiency. We heard from the right reverend Prelate the Bishop of St Albans about the current energy crisis as an opportunity to invest in renewables. He will know as well as I do that the UK is the G7 country that has gone furthest and fastest in decarbonisation, but of course we have a lot more to do. He is right that we heard in a Question earlier today about the challenges of decarbonising our homes and buildings, but the Government are committed to tackling this through the heating and building strategy. And it is not all bad news on that front: the most effective part of that scheme was the social building decarbonisation fund, which has the joint benefit of reducing bills for those who may need the most support.

The right reverend Prelate asked a specific question about the feed-in tariff price; if I may, I will write to him on that. 

Lord Eatwell (Lab): My Lords, I am grateful to all participants in this debate, which has been I think both timely and interesting.

There have been two background themes in what people have had to say. One has been concern about the very bad place that Britain is in now, whether we are referring to inflation, as did the noble Lord, Lord Griffiths, and my noble friends Lord Davies and Lord Stansgate; whether we are discussing energy issues and how the crisis is perhaps pushing energy and green issues in the wrong direction, as was suggested by the right reverend Prelate the Bishop of St Albans, the noble Baroness, Lady Jones, and my noble friend Lord Tunnicliffe; or whether we are referring to the issue of trust in society, going back to Robert Putnam’s famous Bowling Alone—and the way in which the glue of trust is being eroded by inflation as the noble Lord, Lord Griffiths, most powerfully argued—about which the right reverend Prelate the Bishop of St Albans, was also concerned, as was the noble Baroness, Lady Kramer, in particular with her reference to young people, and my noble friend Lord Tunnicliffe. There has also been the overall despair at the rise in poverty in this country at this time, expressed very powerfully again by the noble Lord, Lord Griffiths, by my noble friends Lord Sikka, Lord Davies and Lord Stansgate, and by the noble Baroness, Lady Kramer. This is the sort of desperate concern about the position we are in.

But the other theme has been “Well, what are we going to do about it? How do we rebuild?” Do we learn, as the noble Lord, Lord Desai, argued, from when it happened before, with respect to the experience of the 1970s? Are we willing to undertake the sort of radical reconstruction of our economy and our society, of the basic arrangements by which this country operates, to create the resilience so that this does not happen again on the same scale of desperation as we have had now?