The Financial Fairness podcast

The Living Standards Election?


  • Torsten Bell, Resolution Foundation
  • Clare Moriarty, Citizens Advice

January 2024

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In this episode, we are joined by Torsten Bell from the Resolution Foundation and Clare Moriarty from Citizens Advice we discuss how the squeeze on living standards might influence the general election. Guests consider where people are feeling the squeeze, how that has changed over time, and how likely it is to influence the way they vote in the upcoming general election. Mubin asks Claire and Torsten what can be done to improve living standards and they talk about how we could all aim to be a bit more Dutch.


Mubin Haq: Welcome again to the Financial Fairness podcast with me, Mubin Haq.

Our focus today is whether this will be the living standards election. We’ll be discussing how the squeeze on living standards might influence our upcoming election and what big policy ideas the parties will be promoting to resuscitate our finances. Will it be more tax cuts or focus on growth? And why the answer may lie in us being a bit more Canadian and a bit more Dutch.

Today we’re joined by Torsten Bell who leads the thinktank, The Resolution Foundation and Clare Moriarty who runs Citizen’s Advice.

Torsten, I wonder if you can set the scene, we all know the sort of acute pain many have been facing during the recent cost of living crisis. But what's been the long-term trend in living standards?

Torsten Bell: Well, the big picture that everyone is living with right now is much higher costs over the course of the last two years, and that putting huge strain on family budgets, actually low-income, middle-income, high-income budgets in a way that we're not used to seeing. The reason that's been so hard to cope with, beyond the obvious that we've seen energy bills rising by £1000, food bills also up by £1000, is because it comes on the back of 15 years of slow growth, almost no wage growth at all. And because in the end, we're all part of a global economy, when we see a short-term crisis like the one that we're living with right now, turn up on the back of that deeper crisis, it leads to really bad outcomes. And that is where Britain finds itself in 2024.

Mubin: And just in terms of pounds, and pence, how much have people lost?

Torsten: Well, if we step back, and I know this is painful to do, but if we go back to the start of the financial crisis and think what would have happened if wages had carried on growing at the level we were used to before that crisis - which was about 2.2% a year, feels like a long time ago now but that's what we were used to seeing - then wages today would be over £10,000 per worker, higher. That's why this stuff matters so much when people say, ‘Oh, you know, who cares about economic growth?’ Well, an economy not growing and that not feeding through into wage growth for ordinary workers, that difference is over £10,000 per worker. And that's, you know, that's why we're struggling so hard, while our energy bills are going up.

Mubin: Wow, I mean, that’s a huge amount, £10,000, that the average worker has lost each year in pay growth. What’s driving this stagnation?

Torsten: So, the big change, not just in the UK but across countries, is that we have seen a slowdown in productivity growth since the financial crisis. So, when people talk about GDP growth, they mean the economy producing more goods and services for a given level of input. In particular, for a given amount of work we all do. And we were used to that growing reasonably consistently over the years before the financial crisis. We’ve then seen a slowdown across the advanced economies, since the financial crisis, in productivity growth and in terms of GDP growth. But the UK’s has been markedly bigger than elsewhere. We’ve seen about half the productivity growth since the financial crisis that the OECD, rich economies, have seen – only about 0.4% a year. That is the underlying reason why wages haven’t been growing. It’s also why I think we should be really careful. You know, it’s quite popular to say things like, ‘Oh, who’s GDP growth is this? Who needs who needs a growing economy anyway?’ Well, if you don’t have it, that is why wages are not growing. The price of not having that growth is really, very high indeed. It doesn’t mean you want growth at any cost, clearly you want it within environmental constraints, and you want to make sure that everybody benefits from it, but not having it, it turns out is very expensive for all of us.

Mubin: Yeah. So, Clare, Citizens Advice has been at the frontline of this current crisis. Can you tell us a bit about what your advisors are seeing and how people are coping with a squeeze on living standards?

Clare Moriarty: Everywhere I go across the local Citizen’s Advice network, what I hear from people is, you know, things are getting worse.

There is a tendency to think of 2022 as having been the cost-of-living crisis. That was when we were all talking about cost-of-living all the time. I feel like I spent most of 2023 saying to people, no, actually, you know, 2023 is worse on pretty much every single measure. Because for people in the most difficult positions – people on low incomes – the sorts of things that started to ease life for many of us, and government talks a lot about wages having increased, inflation’s eased, well actually those are not things which have had a material impact on people on low incomes. So, what we’ve seen is higher numbers of people in 2023 than 2022, who needed crisis support – that’s people needing food bank vouchers, or charitable donations, just to be able to put food on the table. We continue to see a big rise in the number of people who couldn’t top up prepayment meters. So, by the end of 2023, we’d seen more than the whole of 2022 and 2021 combined. And 2022 was a huge year, equivalent of the whole of the previous decade. We’ve seen more people with energy issues, with energy debt, and we really started to see in the second half of the year is a big increase in people with housing and homelessness issues. I don’t think there’s any reason to think that the early months of 2024 are going to be any better for people in difficult circumstances. Large numbers of people who just can’t make ends meet, for whom, you know, putting food on the table, keeping the lights on, is a real, real struggle.

Mubin: That’s a hugely bleak picture. In terms of people who are particularly affected, are you seeing some trends there? For example, is it more single parents? People in insecure work? I mean, these are trends we’ve seen over many years in terms of those in poverty. But is that what’s been replicated here in terms of this crisis?

Clare: Yes, I think we’re seeing very much those patterns, particularly people who are disabled or have long-term health conditions. Among the people coming to us with cost-of-living problems, it’s over 60% of people who are disabled or with a long-term health condition. Single parents, as you said, single people generally and single parents, people in insecure work and people in the private rented sector who are particularly experiencing these issues with rents and with evictions.

Mubin: So, Torsten, high inflation has obviously been a key factor in the cost-of-living crisis but that’s been tumbling of late. But we’ve seen interest rates rising. So, the picture is changing. Can you explain what the impact of those changes have been? And is the crisis over now, and Clare’s saying not, but just getting your perspective on this?

Torsten: Well, I think using the benchmark of, are we starting to see the numbers of people coming into Citizen’s Advice for help going down rather than up as a benchmark makes a lot of sense to me. So, let’s take Clare’s word for the headline of whether it’s over and when it’s over.

On the, and I think it is good to think about though, this is a crisis that comes in quite distinct phases. And I think, rather than being like there’s one big crisis and then it ends, really what we’ve seen is a crisis whose initial phase was very energy focused. And you saw that happening in the April of 2022. Very big steep rise in energy to levels that we didn’t think were possible, government having to step in with huge emergency support capping energy bills in the summer of 2022.

Then, if I’m honest, I think we were all too slow to see that the epicentre of the crisis moved as energy bills started to come down. So, I don’t want to overdo it, they’re still far above the levels we saw pre-crisis. But energy bills started to come down into the spring and summer of 2023. But food prices had already been rising very significantly. And actually, by the summer of ’23, the food price rise for the typical household was bigger than the energy price rise, but because energy is easier to see – one big bill, government regulation, much more likely to get into debt with it, because you can use energy and not, not pay for it upfront necessarily, but that’s quite hard to do with food. So, we do tend to talk about energy in British politics in a way that food doesn’t get that attention. But I think that meant we were too slow to notice that the epicentre had moved to food. And that had a very real effect. I mean, our latest survey of the public showed a third of poorer households still skipping meals in the autumn of 2023. You know, that was up about three times what we were used to before the cost-of-living crisis. So, for those people, it’s definitely not over. So, food then, the next epicentre.

And I think we’re now moving into a phase where probably housing is moving centre stage, and it’s doing it for different groups in different ways. I mean, if you want a group that has got the best chance of the crisis feeling like it’s receding during 2024, then I think it’s outright owners, particularly outright owners who are working. So, if you own your house without a mortgage, which remember now is the single biggest tenure in this country, there are a lot of those people now, many more than most European economies. Those people will be through the worst of some of these price rises but won’t be seeing the housing costs increases that the rest of the population is seeing.

Then you’ve got two groups on the housing cost rise going on. We’ve got the one that gets all the media attention, which is to do with mortgage increases coming through. So, we think about one and a half million households will be remortgaging over the course of 2024. The average increase in their mortgage is somewhere between £1,500 and £1,800 per household. So, it’s a lot of money, it’s a very big hit, if your mortgage happens to be going up, because you’re coming off your fixed term mortgage. I know the newspapers at the moment are full of stories about the interest rates coming down a bit faster than people were expecting because of what you mentioned, Mubin, because of those inflation falls. But you’re still telling people their mortgage bill is going up a lot, it’s just not going up as much as they feared, a month or two ago.  But if you are affected, it’s a really big deal for mortgages. So low-income mortgages, we should definitely be worried about in particular.

Then we’ve got a wider spread problem which is that for renters, they’re more likely to be seeing a rent rise. So then, in terms of your proportional chance of being hit, it’s higher for renters than for mortgagers. And it’s a big deal. Now, why are rents going up? The popular version put around by landlords and others is they’re going up because buy to let mortgages have gone up. Now that might be the reason the landlord wants to put up rents, but the reason that in general, what we see if we look over long periods is that rents basically rise in line with earnings. And the reason why we’re seeing these big rent rises coming through now is because, on average, wages did rise quite a lot as people kind of tried to keep up with that rising inflation last year. So, over the summer, we saw wage rises running at 8%. I know everyone’s going to be screaming saying I didn’t get an 8% rise.  But the point is on average, we did see wage growth, nominal wage growth, not real wage growth, and rents are going to follow that in time. So, the reason why landlords are getting away with it is because on average, wages have gone up in nominal terms. And the reason that is a big problem is because if you are now facing that rent rise but didn’t see the wage rises, because that’s an average figure and lots of people have had far lower wage rises than that, well it’s going to be really, really difficult. And that is what you’re now seeing. And that’s why there’s also remember a load of people whose income does not primarily come from the world of work, or who just had bad luck. You’ve had a bad year, you’ve lost your job, or anything else bad has happened. You’ve had your hours cut, but your rent’s going up, then, you know, it’s a really tough time.

So, I think one thing that’s really important when we think about 2024 is, we’re used to saying oh look, you know, we’ve had these high energy bill rises, we’ve had these food bill rises, that’s bad for everybody. Even if it’s worse for the poorest because they can least afford it. We’re now entering a phase where, for some people, some people who are in work, some people who are outright owners, things might be starting to improve, but for other people things are going to be getting a lot worse. And that is going to make this national conversation harder. Some people listening to the news and hearing you know, as they will do as an election year kicks off Rishi Sunak saying we’ve turned the corner. Well for them, it won’t feel like we’ve turned the corner because their mortgage has gone through the roof, or their rent is going up and they can’t afford it. I think that is what’s causing some of what we’re seeing that Clare’s mentioning in terms of, you know, really serious housing distress, because averages aren’t any use at helping us understand what’s happening to actual people and your rent’s going up by 10% and your income’s not – it’s an absolute disaster.

Mubin: And it’s not as if renters have had an easy time over the past 10-15 years, it’s been quite chronic for them in terms of how much they’re paying in rent. How much of this problem with mortgages and rents are you seeing at Citizens Advice, Clare? And are there any other issues surfacing that have not yet become mainstream?

Clare: We are seeing high numbers of people are coming to us with mortgages. So, it's still a small proportion of the total numbers. But when they do come, what we're seeing is that effect of the big increases. So, where people are coming to us with mortgages for debt advice, often they will now be among the people who are most likely to be in a negative budget and their average monthly deficit is now the largest. But I think this issue about people in the private rented sector and just the relentlessness of the of the rises and the difficulty of responding to them. And as you'd expect, it's all more difficult for people on lower incomes. And the response over a number of years has been that people have reduced their expenditure. And we've seen that in all sorts of different ways. Now, that is a problem for people because if you don't eat, it's bad for your health. If you don't heat your home properly, it's bad for your health. But actually with one of the things about housing costs is actually there is only so much you can do to squeeze them. And often people can't actually move. So, it does feel like a really intractable problem, where people are trapped in a situation where the amount, they're paying for their housing is only going up. They don't have realistic options to trade out of that accommodation with those costs to something that is cheaper. And it does look at the moment as if housing is the single thing that is most problematically driving this problem of negative budgets, which is what we're really focusing on. Because if your income does not cover your essential costs, then you have no hope really of getting out of debt because the debt solutions don't work and indeed, you're likely to see debt just kind of racking up month on month.

Mubin: So, Torsten and Clare, you’ve outlined a picture in which the problem is improving for some and becoming more acute for others. Is this leading to fatigue in relation to the cost-of-living crisis? Are we seeing reduced public concern?

Clare: So, I think we are, and it's something that worries us a lot at Citizens Advice because, in order for policy change to happen, there needs to be a common and collective societal understanding of the problem. And if it's not something that's being talked about, it's very difficult to kind of generate that level of interest. We certainly saw through 2022, there was lots and lots of interest, you know, we were endlessly talking about it, there was a kind of high level of generalised attention on the issue. 2023, that's very largely fallen away. And I don't think it's fallen away because the things that have come along have been even more preoccupying for the media agenda. Because if you think back to the early months of 2022, that was the start of the Ukraine war. So, there were lots and lots of other things going on, but it was something that, I think because, as Torsten was saying, energy is a very, you know, it's a sort of single thing that people can get their heads and their hands around. And it was something very specific to concentrate on and the fact that we have the energy price cap, so it kind of, it all crystallised into this one single figure that we all became absolutely focused on. That meant that there was, you know, a commensurate level of public attention given to the issue.

We're now in a situation where, just as we've been describing for lots of people, it's sort of settled down to a to a new normal, and you can see how the trajectory might, might work. And it's no longer just about that single point figure of energy. So, the attention has dissipated. And we're just not getting the focus that we need in order for people to solve what is, you know, it's a big growing problem. We're not talking about small numbers of people who are affected. But we, it just doesn't have that kind of mass impact that caused the really big attention, and which in turn drove some very large policy interventions that the government made during the course of 2022.

Mubin: I’m guessing you'd agree with that outline, Torsten?

Torsten:  Yeah, that is basically where we are. The other thing to think about is, you know, in the news agenda sense we'll obviously focus on what has changed, and so what's changed recently is that the rate of inflation has come down, like you say, Mubin, there is good news on that front. We had double digit inflation back in March 23. We're now down to 3.9% in November. So that is where we understand that we focus, that's definitely where economists focus who are worried about, you know, is inflation under control?

For people obviously, it's less about those individual changes and it's more about big picture of are you better off than you were a while back. And obviously, we're just a long way from that even though real wages are growing, we'll still be seeing wages that are stuck around their 2007 levels come the election by the end of this year, even if wages grow decently over the course of this year. So, in the same way that you know, there's a big debate in the US at the moment, I'm being unfair here on the Democrat position, but it kind of collapses into - why aren't people more grateful? Basically, you know, unemployment is low, we've managed to get inflation down without large unemployment. Well, that is great. And we are seeing real wages growing, but real wages in the US, just like real wages here, are lower than they were a few years back. And the idea that people should somehow, you know, think it's happy days, because it stopped getting much worse. Poorer households will just be having a really tough time in that situation. I think it would just shock people. They have been seeing in recent decades, higher amounts of their spending going on essentials, cutting back on almost everything else. Okay. I think that's, you know, we're meant to be a country that gets better over time. But that is not what has been happening to poorer, younger households. Things have been getting worse. So, the lesson is, yes, we've got to get through this cost-of-living crisis. But we've got to start unwinding some of the problems that have left us in that situation.

You know, what it meant to be poor in Britain has got worse in recent decades and that's really important to understand. They are consuming less, they are consuming more on essentials, life is less full of joy. That is what we should be taking away from this crisis. Rather than thinking, Okay, well, inflation is gone away. Happy Days. We should be saying - the lesson we learned from this is that we are not in a situation that we should be in. And we've got to start dealing with the deep crisis, not just getting through whichever next phase of this crisis turns up.

Mubin: Yep. And we’ve also seen something else, which is either moving back home with their parents - talking about younger people here. So, we've seen big rises in that, or going into more shared accommodation, which is causing other problems, including in relation to mental health. So, there is some squeeze still happening, but it's problematic.

Torsten: So housing is a long-term squeeze. Actually, the big housing cost rise problem mainly came through in the 1990s. Basically, as we deregulated the rental market, and let's not get into whether or not that was a good idea, there are pros and there are cons, but the level of rents relative to income rose very significantly. And that then over time through the 90s and the 2000s, fed through into higher house prices on the back of lower interest rates.

So, what that has meant is that everybody who didn't already own their property, was facing these higher housing costs, as a share of their incomes. I mean, remember, you go back to the 1970s, people were spending on average about 10% of their income on housing. What's then changed is that different groups have been suffering in different ways since. So generally, poorer people's housing costs have been rising faster, while richer people's housing costs have come down, because lower interest rates until recently gave them lower mortgages. That's why so many people paid off their mortgage. And that is one of the underlying pressures on poorer households’ budgets. Just more expensive housing costs, not in the last year or two, although that is now happening, but actually looking at the last 30 years, and that is one of the longer-term drivers of this deep squeeze.

Mubin: So, Torsten, you said earlier that in the US, people - the Democrats are saying - well, people should feel grateful about what they've had. What's your sense of how people think about the support government's provided here? Are they feeling grateful?

Torsten: I'm certain that the President is not telling people they should feel grateful. or using that language. But I think they're definitely thinking, why aren't they more grateful? Even if they’re not vocalizing it. Now, do people feel grateful? I mean, look, nobody thinks that the last few years have been easy. What I would say is that overall, and I'm not saying always as quickly as I would have liked, but overall, has the government broadly done the right thing in providing very large support that in particular was targeted at poorer households, because the nature of this crisis required it? And I think that is generally recognised, if you look at what happened to income falls during this crisis, because of the government action they were smaller for those on lower incomes. Now, they're about to unwind. Remember the cost-of-living payments, the last payment is happening in February ‘24. And those on the lowest incomes, will be seeing incomes fall over the course of the next financial year. But yes, to date, it has made a huge difference. Is it absolutely everything I would have wanted? No. I think things could have been a lot worse, but no, I'm not sure anyone is feeling gratitude. I mean, the last two years have been terrible for everybody.

Mubin: Clare, to what extent is this going to be the living standards election? How big an issue will it be?

Clare: I think it certainly needs to be a big issue in this election, because it is a very significant issue facing us as a society. And so, both from the point of view of the people who are most affected by it, but also more generally, you know, how do we address the largest issues in society? How do we want to be as a society? It's something that we should not collectively just be, you know, turning our back on and saying, well, you know, here’s a problem for a group of people, they're not numerically large enough for us to pay to pay attention to it. So, I think, in polling, people are still saying that the cost of living and living standards are a top priority, and they think that neither party is doing enough to tackle it. So, if the temptation for politicians is to focus either on issues which feel more specifically like wedge issues, or to kind of generalise away from the issues facing the segments of society that we've been talking about today, then I think that will be a great mistake.

I don't think for the people who we see at Citizens Advice at any point in 2024 do we expect it suddenly to be in a better position. The benefit payments will go up in April and that will be another material increase. The last of the cost-of-living payments is being made in February. There is no support for energy prices over this winter. We called for that on many occasions, because there clearly continues to be an issue for a large group of people on energy costs. One of the other things that the government put in place was the Household Support Fund, which was discretionary funding distributed via local authorities, quite a piecemeal way. But that has been another quite important part of the sort of solutions available at local level, but that is finishing in March. So that's going to be effectively, you know, removing another source from people.

So, I think for those for those people who are, who are struggling those interventions that the government has made have either been universal. So, things like the Council Tax Rebate, which was nearly universal, the Energy Bill Support Scheme, the Energy Price Guarantee, those were for everyone, they were very expensive. Or else they've been measures targeted on people on means tested benefits, essentially, because the government has their bank details and is therefore able to put money in their bank accounts. Anything between those two groups is really difficult to do because it requires, you know, mechanisms that enable government to reach cohorts of people bigger than, or different to, the means tested benefits group but not as big as the whole country. We know that there's quite a cohort of people who are not on means tested benefits but who are really struggling. And I think that's where there needs to be some really serious thinking. But whether or not it will have the salience that's needed to make it a key issue in the election will probably depend less on the real importance of the issue and more on what's going on in the wider environment.

Torsten: I definitely don't think we should conclude it's not going to be a cost-of-living election. I think that would be ignoring what the punters are telling us that that is their top concern, still. Because they're paying attention to the prices they're paying in the shops and not what the, you know, ONS says is happening to CPI inflation rates but, you know, it is the thing people are worried about. If we look at what people are actually saying in terms of their food insecurity, those numbers have come down slightly, but they're still absolutely terrible.

If you look at what the political parties are saying, that also points towards this being a cost-of-living election. Like, what are the Conservatives spending the start of this year talking about? Tax cuts that they say will boost people's incomes, which they will obviously for some if not for others. And what is the Labour Party saying? Well, it's saying you know, vote for change this year, that's how we get growth back in the economy, that's how our living standards rise. So, I think it is going to be a living standards election. The question is does it do justice to this, the discussion we're having about the myriad of effects particularly on lower income households, but there's no way around it being a living standard election I don't think.

Mubin: Okay, Great, that is very important, Torsten. So, you've obviously touched on the tax cuts giveaway, the National Insurance cut that we saw recently which is now filtering through to people's pockets. What else are, are the Conservatives offering in relation to living standards? Have they got any other big-ticket items, Torsten?

Torsten: Well, look the big picture for both parties is for the Conservatives it's: we’ve given you a tax cut and there's more to come and, by more to come they mean, possibly in the March budget. But they also mean if you elect us again, in the autumn of 24, there'll be more tax cuts to come because we're the tax cutting party. And for the Labour Party, then the promise is basically: we won't put up your taxes loads, like the other lot. They've already put your taxes up by much more than they're now cutting them. So, the Tories are the real tax risers is the argument. And then an argument which is twofold, really. We'll get growth says Keir Starmer. There's two big planks to his argument. One is because we are more stable, we’ll provide stable adult leadership and that's how we'll support investment levels, and that hasn't been what you've had from the Conservatives. And then secondly, a green growth argument, so £28 billion of investment. Those two, they're not the only ones I should say - but those are the main planks of Labour's argument to get growth and that's how you boost living standards.

Now around that both parties have other things they talk about though, in the living standards space. Actually, the Conservatives don't really talk about it, but the big decision that the chancellor took in the autumn statement for poorer households in the private rented sector is to reattach the level of Housing Benefit they received to the actual level of rents in their areas. Now, he's not done that permanently, but he has undone a very big problem. Like, why are more people who are renting coming into Citizens Advice? One of the reasons is because we have frozen at 2019 rent levels, the amount of Housing Benefit support those people have been getting. And unsurprisingly, when rents are going up a lot because inflation is high, well, then you're going to get people who can't afford their rents. And that's exactly what's been happening. And they eventually realised that was totally unsustainable. Now, higher benefits isn't what the government wants to talk about in terms of what they're doing so it's not on the leaflets. But that is actually the most important thing they've done in terms of poorer households, in the recent past.

Now, obviously, in the long run, we just need to have it being perfectly normal that housing support rises in line with rents, otherwise, people will end up homeless. And that's what we've been seeing recently. So, there are other things that the parties have in their policy list, but the big things are tax cuts from the Conservatives and growth from Labour. That's basically the election row when it comes to living standards.

Mubin: And Clare, are you seeing any other policies coming through, are we going to see any movement on Social Security, for example?

Clare: There's been a lot of narrative from the Conservative Party about reducing the number of people on particularly on disability benefits, getting people back to work. And I think nobody would dispute that for people who want to be working and aren't at the moment, then the right support needs to be in place so that those people can return to work. That bit is the easy bit to remove. Supporting people in really, you know, person-centred ways, so that they can be enabled to take on work that they're able to do and move, move possibly from something that's quite on a small scale to doing more work. That's the bit which is not so prevalent. I mean, the government wants people to be in high paid high skilled jobs. I think everybody would like that to be the case. But actually, what are the practical steps that need to be in place for that to come about? And it's not just saying to people, you know, get a job that you can do from home. Because the vast majority of low paid jobs coincide with jobs that can't be done from home. So, I think it’s that, it's that broader approach to the welfare system.

I think the difficult thing is that the sorts of things that Torsten and I have been talking about, you know, would cost quite a lot of money to fix in a really sustainable way. And you know, there is certainly no sign from any of the parties that they are planning to put a lot of money into the system. Although I think the Lib Dems have said they would reinstate the £20 a week Universal Credit uplift, which did make a huge difference to the number of people in, in difficulties. But absent very large injections of money which, from both a fiscal and political point of view are quite, are quite difficult, then the other things that I would be looking for is real attention to some of the, the administrative architecture around benefits, both from the point of view of how many hoops you make people jump through in order to get the benefits they're entitled to and the support, really, really kind of thoughtful support that helps people get into jobs rather than just using some quite blunt instruments - financial incentives.

Mubin: Torsten, have we got the quantum right, in terms of what's needed? I mean, you know, you've given this sort of broad overview of the two parties in the main and their positions, but is the quantum right?

Torsten: Well, I mean that’s a big question. I mean, stepping back, look what is the task facing whoever wins the next general election if what we care about is seeing some meaningful living standards improvements? It is getting this economy growing again and making sure that we're a more equal society. And we've got to do both of those things. Because it is the combination of us being low growth for the last 15 years and high inequality for the last 40 years that has left us with low- and middle-income Britons so vulnerable to these crises coming on. So that is the task. That is, that is a big one. It does require significant changes on the social security side. In the long run, if you don't allow social security levels to rise in line with earnings for working age population in a way that we do for the pensioner population, you're basically saying poorer households, including those with disabilities will permanently get poorer than the rest of the population. And that isn't the situation we can have. Because remember lots of the costs those families face rise in line with growth in the economy, like housing, for example. So, you'll be making them permanently poorer every year if you don't sort that out. So, there's big change needed on that front.

On growth. Yes, I mean, look, unless we start investing, I mean public investment and private investment, in our future then we're not going to see a sustained level of faster growth in this economy. And if we don't do that, we're not going to have our living standards rising. So, the quantum of action, that anyone who wins the next election will need to take or should be considering, is very large. We should be looking back at the last 15 years and saying this is not what success looks like. It is going to take a different approach and a new way forward.

But we should also take some confidence that it can be done, you know. Lots of countries are both richer than us and more equal than us. I don't mean kind of Nirvana's, like American levels of growth and Scandinavian levels of inequality. Just being a bit more Dutch, a bit more Canadian. And both those countries, by the way, are far richer than us and more equal than us, as is Australia, France. That is what success looks like. And yes, it will take a much broader agenda than either party is outlining before a general election. But all I would say is, you know parties don't tend to set out all of the nuts and bolts of what they're going to do ahead of a general election, even ones with quite big change agendas. Like go back to 1979, read Margaret Thatcher's manifesto from 1979. What it includes is the agenda, the argument - more freedom, less state. It doesn't include almost any of the policies that came to define the 1980s. So, my hope is, not that we're suddenly going to get a manifesto absolutely chock full of policy because I've been around long enough to know that isn't what's going to happen, but instead that people step back, look at what we've been through, realise that Britain can't carry on as it is, and whoever forms the next government gets on with the bigger task of putting in place a new economic strategy, the objectives of which must be to get growth up and get inequality down. And yeah, that is a big deal, like you say, Mubin. But in the end, countries either escape from their stagnations, as Britain has in its past, as other countries have, or it gets stuck in them like Italy is. And in the end, we want to be in the former category, not in the latter.

Mubin: Yeah, it feels like as if we have been a bit like Italy with all the different governments coming into play.

Torsten: Well, different, different Prime Ministers, Mubin, just one, just one government.

Mubin: That's very true. Clare, how hopeful are you about where we will get to in five years’ time?

Clare: So, I'm a great believer in hope because I think without hope, then then we will give up and go home. And I mean, just reflecting on one of the things that Torsten was saying, I think equality and reducing inequality is so key to this. And resilience is absolutely at the heart of this. And the problems that we're seeing now are definitely not the product of just the last two years. They are the product of quite a long period in which we have not paid sufficient attention to resilience and inequality, because an unequal society is not going to be a resilient society. And if you look at, our recovery from the financial crisis was very much predicated on pouring concrete and doing a lot of kind of capital investment, while squeezing spending on public services. And what we've seen during that time is growth in inequality. What we've also seen is a reduction in life expectancy, which is, is a really, really big red flag for any country to see our life expectancy going down. And we went into the pandemic like that, and, you know, the pandemic, what all big external shocks are, it reinforced inequalities. So, I have to, as an article of faith, have to have to hope that we will collectively get together and think about how we close those gaps, become more resilient. Because that is the only way that we will cope with the next big global shock and, as Torsten says, I like the idea of being a bit more Dutch, a bit more Canadian. Not pretending to ourselves that we can suddenly change our national identity because national identity is very deeply wired, but just thinking about the sorts of people who come to Citizen’s Advice for help because they are in circumstances, not of their own making, which, you know, just make life really, really difficult. How do we systematically try and make things at the margin better for people in those situations.

Mubin: Well, let's end on that message of hope and hope we actually get there. Thanks very much for your time. It's great having both of you on the show.