The Financial Fairness podcast

Guest: Helen Barnard

June 2022

The UK is facing the most serious cost of living crisis in a generation, but it's those on the lowest incomes who are being hit hardest.

In this episode we look beyond the headlines with Helen Barnard, Director of Research and Policy at Pro Bono Economics and Associate Director of the Joseph Rowntree Foundation. Helen is an expert on poverty, inequality and social policy. Her extensive body of written work and regular media contributions have covered poverty, destitution, labour markets, housing and social security. 

Mubin and Helen discuss how those on lower incomes are particularly disadvantaged by the cost of living crisis. For more on how the economic system harms people at the bottom, how it was created and how it can be fixed, listen now.

Listen to the podcastkeyboard_arrow_right

 

Transcript

 

Mubin: Welcome to the Financial Fairness Podcast with me, Mubin Haq

Today we’re talking about the cost of living. The UK is facing the most serious cost of living crisis in a generation.

Rising energy costs and high inflation dominate the headlines – but are they only part of the story? Are there more endemic economic factors at play, rooted in a decade of wage stagnation, real-terms cuts to benefits and policies that have failed a generation? Was this a crisis in waiting?

Here to look beyond the headlines is Helen Barnard, Director of Research and Policy at Pro Bono Economics and Associate Director of the Joseph Rowntree Foundation.

Helen is a leading national expert on poverty, inequality and social policy.

Helen, what's been the general picture in terms of living standards over the past two or three decades?

Helen: So what we've really seen is that, if you look at the last decade, we started describing it as a kind of a lost decade. Because essentially, as a country, we had stagnant growth for about that decade. So, after the financial crash, we had a recovery, but living standards didn't really recover actually.

If you look at just overall household incomes, median earnings and so on, they just stayed flat. And underlying that one of the big issues is that we have a real productivity problem when you compare the UK to other countries.  And what that means is that’s dragging the overall economy down, which then drags down earnings and so on. So the economy has been pretty weak for quite a long time really, since the financial crash.

Mubin: Interesting, so the UK is doing worse in terms of productivity. Which countries are doing well in relation to productivity and earnings?

Helen: Most other countries that we've looked at are doing better than us. One of the most interesting things that we looked at a few years ago, was looking at the big sectors in our economy - so the big volume employment sectors, the service sectors, retail shops and hospitality, restaurants, and so on. And when you look at those same sectors, in other European countries, they have higher productivity, whereas we have in the UK, this long tail of poor productivity.

And what that has helped to create is a kind of a two tier labour market, where you've got a growth in really low paying jobs, insecure jobs at the bottom of the labour market, you've also got a growth in high paying jobs at the top of the labour market. But it is once you get stuck in the lower bit, it is incredibly hard to move up into better jobs. If you went back, 20, 30 years, I think the underlying assumption was, particularly if you left school, without that many qualifications, you can get an entry level job, you can work hard, you work your way up. And by the time you get to the point that you're having a family and you want to support children, or buy a home or whatever, you would be in a better paying job.

Actually, what we've seen in the last decade or so, is when you look at people who are low paid, if you go back a few years later, they're still low paid, people are not able to break out into better paid jobs. And that means you've got these generations of people who are spending their whole lives in low paid jobs. They're not able to buy a home, they're still renting. They're stuck in high cost private rented homes. So you've got this ongoing, low level of living standards,

Mubin: That idea of people being stuck in low paid jobs isn't necessarily new though is it? I mean that's been around for quite a while

Helen: It has, but one of maybe one of the biggest economic stories in the last couple of decades has been the growth of in work poverty. So you're right, we've always had low paid jobs. But what used to happen was one of two things. Either people in low paid jobs were living with people who had better paid jobs, or actually, as a family, they did alright. And/or people in low paid jobs didn't stay there that long, they moved through into something better.

Actually, what we've been finding, is more and more workers getting stuck in poverty. And that's a mixture of things. So that's partly about the jobs being low paid as in hourly pay. But actually, it's not just that, you've got insecurity. So people are in these jobs where they don't know one week to next what shift they're working, they have patches of being out of work because they haven't got any protection. If you get sick, you have to drop out of work, you don't have sick pay. And so you get people who are stuck cycling in and out of insecure jobs. But there's also underemployment. So people who would like to work more hours but can't find them, or people who are qualified for better jobs, but can't move into them. And that's partly because more people are juggling work and caring, and illness. So you've got lots more women and mothers in the labour market, you've got more disabled people. But people can't find jobs which are decently paid, match the qualification level, and have enough flexibility that you can organize your life around them. you've got a labour market that still operates as if it's the old style single male, healthy breadwinner, and everyone else dependent on them. But actually, that's not a modern labour market, a modern labour market is disabled people and people caring for adults and parents who are juggling caring and work. And a lot of the labour market has not caught up to that. And that is one of the things trapping people in hardship.

Mubin: What's the sort of changes you'd like to see then in relation to the labour market? We've seen quite a lot more in flexibility in terms of working hours but what further changes would you like to see?

Helen: I think one of the biggest things is, we've been promised for several years an employment bill, which would address workers’ rights at the bottom of the labour market. Things like workers should have the right to a contract that reflects their actual working hours. They should have a right to forward notice of their shifts, they should have a right to be paid if shifts are cancelled last minute. And also, actually, you've got this grey area in the economy between whether you're deemed an employee - with a whole bundle of rights around you - or a worker with a bit less rights or you're self-employed. And that has become very, very opaque as to which of those you actually are. So actually, one of the things which I think is a great idea is - workers should have the right to actually a contract that says you are this kind of worker, which means you have this kind of right. So that would really help.

The other thing is enforcement. It's one of those things, people talk a lot about new laws and remarkably little about enforcing laws we've already got. And so actually, one of the things we need – so again, we've been promised it for a long time - a single enforcement body to enforce labour market regulations. So minimum wage, health and safety and fair treatment and not being forced into self employment just because it suits your employer when you are really a worker. So we need an enforcement body and we need enough people. We haven't got enough inspectors, for instance, to enforce the laws we already have. Now all of that, you know, it's not as shiny as let's just raise minimum wage but it can make a massive difference to a lot of the people who are stuck at the bottom of the labour market.

Mubin: And no employment bill is forecast at present.  It’s interesting what you’ve told us about people in work, but what about social security? What's been happening in that area in relation to the cost of living?

Helen: There are two big stories with Social Security. So the first one is, as a country, we have massively improved social security for older people and pensioners. So if you go back 20,30 years, and you had enormous proportions of pensioners in poverty. And there came a point where I think as a nation, we just said, actually, you know, what we're not going to put up with this. Getting older should not mean ending your life in hardship. And so, we brought in much better pension, but crucially, pension credit. So topping up people's state pension with a means tested element, because state pension on its own has never been enough to get you out of poverty, you have to combine it with either a private pension or another top up. So we introduced pension credit, which topped it up for people who didn't have a private pension, we had auto enrolment, which has increased the number of people who are saving for their own pension. So you've actually now got a pretty good system for older people.

That has got more and more out step with the working age, the Social Security system. The story is that you go back 20 years, we introduced in work benefits, recognising that for lots and lots of people, the job they could get was not doing enough to help them afford essentials. And that was very effective, particularly for single parents, for disabled people, for people who find it harder to get a good deal out of the labour market, and harder to work enough hours to get enough pay.

But then the last decade has been a decade in which that working age social security system has been eroded enormously. So, every year, the government can choose how much to raise benefits by. For eight of the last 10 years, the government has chosen to reduce the real value of benefits in one way or another. So we had the freeze to benefits, which meant that benefits have got out of step with how prices are changing. Then we had active cuts to benefits which were put through for lots of different groups. And then you had these other things brought in which are really heavy cuts for smaller groups. So something like the benefit cap, which many people will be familiar with. Now that initially only affected something like 80,000 people. That's gone up now enormously. But what that means is it has completely broken the link between how much benefits you are assessed by the state as needing and how much you get. And so you have people, the vast majority of whom are actually not expected to work, because they have small children, or they have lots of children or they're disabled, their benefits just slashed enormously for purely ideological reasons. And that has left more and more people at the mercy of what's happening (the currents in the labour market and the housing market). And so we've seen things like food insecurity rise, – four in ten Universal Credit recipients are food insecure that they can't afford to eat properly. Now, that is an extraordinary situation in a social security system that is supposed to protect people from harm.

Mubin: So it's pretty grim so far. We've basically got wages which aren't increasing, being fairly stagnant. Social Security, which is being eroded and particular groups facing quite severe cuts. What's been happening on the cost side?

Helen: The single biggest cost for most of us is housing, it's either going to be your rent or your mortgage. And the story with the housing market has been that, there are basically three choices you can either buy a home with a mortgage, or you can get a social rented home or a lower rented home, or you can end up in the private rented sector. Now, of those three, the private rented sector has always been the most expensive, and that's continued to be the case. But what's happened is that the number of people who can get into either of the other two has been shrinking. So, we all know it's become harder and harder to buy a home.

Now, ironically, mortgage costs are now lower than rents, either social or private rents. So if you can get into it, you're likely to find it easier to cover your costs. But obviously, house prices have just been inflated and inflated. And that means that actually just getting onto the housing ladder has become out of reach for people who are in the lower end of middle income. People are finding, particularly newer generations, homeownership has just collapsed.

So you've got people can't get onto the housing ladder, social rented homes, the low cost homes, because so many of those have been sold through right to buy and crucially not replaced. What that means is there's a shrinking amount of the housing market, which if you really need lower rents you can get, which means people are crowded into the private rented sector, which is really expensive. It's also very insecure, it's pretty poor quality often, you have tenants who are living in unsafe conditions, but don't say anything about it, because the landlord can just kick you out or can raise your rent. So, you've got that cost, more and more people are having to cut back on other essentials to keep up with the rent. And one of the big changes when you look at homelessness, so the biggest driver of homelessness used to be family breakdown, it's not anymore, it's people losing a private sector tenancy, largely often because they just can't afford to keep up with the rent. Housing costs have become a bigger and bigger part of the story. And it's one of the things that undermines everything else.

Mubin: And has the living wage helped at all?

Helen: So one of the successes in the labour market has been national living wage. So that has been the minimum wage going up really significantly. And on a pathway to being about two thirds of average wages, which is where most people think it should be. But those rising wages have been undercut, partly, largely by Social Security cuts, but also by rents going up. So you're being paid a bit more, but it's just being eaten up by your rent, so you aren't really any better off. So that has become a really big threat to people's living standards. And the big problem is supply which is we aren't building enough homes, and we aren't buying back enough secondary homes to go into the low cost social rented to give people that kind of secure footing. But other costs as well, childcare costs have shot up. And of course, energy costs, food costs in the very recent period are going up just an eye watering amount.

Mubin: So, these rising prices you’ve just mentioned, food and energy, were they just the final straw which resulted in this crisis becoming full blown?

Helen: Yeah, that's completely right. So pre pandemic, we had more people being pulled into poverty and pulled into risk of it, the pandemic hit, people who were already in poverty, were disproportionately likely to lose their jobs, to lose hours, people on insecure contracts were much more likely to lose their work and not be covered by the furlough scheme, compared to people doing the exact same job but with a secure contract.

And what we saw through the pandemic was actually people on middle and higher incomes actually built up savings because they had jobs you could do from home. They weren't spending on leisure activities. So there's a whole swathe of the population who financially came out of the pandemic in a much more secure situation. We look at people at the bottom fifth or so, they came out of the pandemic, having rundown any savings they had and having racked up debt. So people were precarious going in. They then had this appalling couple of years, came out financially on their knees. And then of course, as the global economy opened up, suddenly you saw inflation take off, because you'd had this artificial holding down of global demand. Suddenly, everyone's opening up again, and everyone's buying things everyone's buying fuel and so on. So prices shoot up. And so you've got this whole group of people who were already struggling, who are now being faced with living costs going up stratospherically without incomes keeping up.

Mubin: That's an interesting point you make. What you’re saying is, inflation is going up because of this pent-up demand - particularly from those who've got resources. But, for the people at the bottom, they’re not necessarily spending any more, they're just trying to buy essentials, and because of this, they’re facing this increase in inflation. Is that correct?

Helen: Yeah, that's right. So you have the overall national inflation rate. And what you can do analytically is actually break it down and say, well, what inflation are different groups facing, given the kinds of things they buy. And so the Institute for Fiscal Studies have done that recently, ONS have started doing it again. And what they found is that at the moment, people on low incomes are facing a real inflation rate, that's about two percentage points higher than people on higher incomes. So you know, if general inflation is 8%, actually, if you're on a low income, it's already 10%, for you. And it's not always the case, you look over the last 10 or 20 years, there are times when inflation is higher for people at higher incomes, because the stuff they buy is getting more expensive. Of course, it doesn't actually matter that much for them. Because it's discretionary, it's leisure spending. But what we're in now is that the things driving up, general inflation, are energy bills, food, those are the two really big things. And those are things that people on low incomes disproportionately spend the money on. If you were going to design an economic situation to properly hammer people at the bottom, this would be what you would design. When you talk to people who are running food banks who are on the front line, a lot of people are saying that they have they've never been as scared as this. They've never seen this kind of thing before. And this level of hardship that they are seeing coming through the door.

Mubin: And people are making all sorts of choices in relation to their living standards and you hear some real horror stories, could you just paint a bit more of a picture of that for us Helen?

Helen: There's some new research from the Young Women's Trust, which has looked particularly at young mothers, found a third of young mothers are having to go without food to try and keep their children fed. So I was hearing one of these young women talking. And she was saying, she makes sure her little girl always has enough food, she is sometimes having one meal a day, if that, she's having a pack of crisps a day, to try and keep herself going. You've got lots and lots of people doing that. There was another story, a six year old girl was keeping a torch by her bed because if she needed to get up in the night, she didn't want to turn the lights on, because she knew her mum was struggling to pay the electric.

And stories about people are swapping tips saying that you can put a bowl of water outside with a black plastic sack on it, it'll warm through enough for you to do the washing up later. The London fire brigade has had to issue a warning saying please don't start fires in your homes to keep warm, because it's really dangerous. We've got quite a few food banks now saying that they are having to give out cold boxes, because the people that they are working with, can't afford to cook. And actually, you've also got now even more than that, people are unplugging the fridge because they can't afford to pay the electric bill, which means that food is going off, but either they don't eat or they're so hungry, they eat it anyway and get ill. There are just these proper horror stories. And these are these are no longer rare. These are things that you're hearing consistently from different charities from different people who are supporting people that this this is becoming a norm in certain parts of our society, which is obviously unacceptable. And just appalling, really frightening I think.

Mubin: Yeah it feels completely Dickensian some of these in a sort of modern-day setting. And you touched on young women there, but are there particular groups who are facing more pressures?

Helen: Yeah, definitely, I mean, so one of the things that comes through most consistently in a lot of the research is that some black and minority ethnic groups, all the things I've talked about, are even worse for some of those groups, and that's particularly Pakistani, Bangladeshi, and the black groups.  People from those groups are disproportionately likely to be low paid to have periods of unemployment. You often see this actually with recessions - which we haven't technically had, but we have effectively had - that recessions tend to affect people from those groups most strongly. And there is a longer what they call the scarring effect. So the impact on your chances of being in work and on your pay, it's worse, and it lasts longer for those groups.

Similarly, in the housing market, so people from those exact same groups are more likely to be facing high housing costs, and to live in lower quality homes. You've got with Social Security, I talked about the benefit cap this particularly egregious policy, disproportionately, it is families in some of these ethnic minority groups who are being caught by that. So definitely there is a real racial injustice, dimension that goes through a lot of this.

And women also, particularly in single parents. It's getting on for half of single parent families are in poverty, pre pandemic you had a lot more single parents in poverty and couple parents, that has got worse again, over the pandemic. And so you've got single parent families really struggling, because obviously, getting enough work at the right pay, and paying the bills is just incredibly hard, if it's just you, and you're on your own. And people in private rented homes, that's the other group, again, disproportionately likely to be low paid, facing high housing costs. And obviously, trying to save for a deposit or save for anything, is incredibly difficult if you are not able to even just cover your bills, week by week, month by month.

Mubin: And what about the impact on disabled people, is that particularly significant?

Helen: It is, some of the work by the Disability Benefits consortium, they've done really detailed analysis. And, you can see that disabled people were especially exposed to those cuts, and people have lost, 1000s of pounds a year through these cuts to Social Security. And actually, what they also found was that the more disabilities you have, and the worse your health, the more cuts you experienced, which, it should be the other way around, shouldn't it you know, the more difficult your life is, and the worse your health is, the more support we should be giving as a society. But actually, it's been the opposite in the last decade or so, we've really cut away the support for disabled people. And I think there's also the less visible cuts. Things like the cuts to local authority budgets, which have been enormous in the last decade, it's something like 40%, I mean, just massive. Those have obviously hammered services What that's meant for disabled people and carers is that the thresholds you have to meet to get help in lots of places have gone up and up and up. I know, anecdotally talking to parents who have children and young people with mental health difficulties of different kinds, actually getting access to support has just got harder and harder, because you have to demonstrate such a high level of need. They've said, we can't get therapy unless the school is calling the police. Or people, talking to teenagers who are saying, she has suicidal ideation, she is really very unwell. But she can't even get access to crisis support, unless she can demonstrate she has actually made an attempt on her own life. Again, you talked about false economies, cutting away these kinds of services. What it means is it's been a massive fall in spending on prevention, preventative services, so support for families, for young people for children, which stops people getting into crisis. We've cut that away, but we're having to spend more on crisis services, which are more expensive. And obviously, once you let someone get into that state, it's so much harder to recover. So the local authority cuts have had a big impact on some of those groups.

Mubin:  I mean, you've been working in this field for, a very long time in terms of poverty. Have you ever seen it this bad?

Helen: No, I don't think I have. I mean, some of the some of what was happening in the 2010s was pretty shocking, pretty difficult. But I guess the two things - one is that we weren't facing this kind of inflation. So costs weren't running away with us in that way. But actually, also, we're facing this situation after a decade in which people have been facing very hard times for a long time, with all the impact that has on your health, and your financial resilience. So I think perhaps it's those two things coming together, that make this feel much more urgent and worrying.

The thing that I think has also changed, though, is actually public and political debate has become far more positive and constructive in the last few years. The way that people are discussing these things, the way the media is covering them, is really different. It's now I think, quite rare to see a story about one of these things, that doesn't have people who have direct experience as part of that story, talking about what it means to them, being, most of the time covered in a pretty respectful way. That wasn't the case a decade ago. And I think, lots of activists and lots of people with direct experience have changed that. And that, that makes me hopeful that we may move to a different kind of paradigm on all this.

Mubin: I'd totally agree. I mean it was all about people being scroungers really, or not really worthy for help and support, so somehow that this was your personal behaviour that had got you into this situation and I think you're absolutely right, that sort of dialogue has changed. It's much more an emphasis on sort of structural issues – not completely - but I think it has moved significantly from where we were. And it's taken a long time in terms of governments putting through some adequate measures or things which might make a difference. Could you just briefly summarise what some of those changes have been and what's your take on whether or not it's been enough or how good they were really?

Helen: For several months, I think pretty much everybody in this kind of field has been saying, we really, really need proper cost of living support targeted at people on lower incomes. And the government steadfastly refused to take the obvious steps, which is put more money through the benefit system. So you had the autumn budget last year, where actually the chancellor pressed ahead with a massive cut to out of work benefits particularly – so £1000 pounds a year, were cut right at the point where we're heading into a cost of living crisis.

I mean, he did put actually £3 billion pounds permanently into in-work benefits. And, that was genuinely good. That was the right thing to do. It was entirely the wrong thing to also cut £3 billion out of, out of work benefits with people who are facing the greatest hardship. So we had that in the autumn budget we then had in February, we had a cost of living package, which was brought out. But was, it was very strange. It was that weird thing they did with council tax. So my working theory was that they wanted to pick a measure, which would be so bad that nobody would want them to keep doing it. And council tax is good for that. Because, why on earth would you pick a measure which targets people based on how much their house was worth 30 years ago? It makes no sense. So they put money in, back in February, but in such a weird way that it really wasn't gonna make any difference. Then they pressed ahead with this massive real terms cut to benefits in April. So they decided not to raise benefits with current inflation, but to keep raising them as if it was last September's inflation. But then finally, in April, after massive pressure, they brought out another cost of living package. And actually, what they bought out, really took quite a lot of people by surprise, because it was genuinely good.

So the cost living package they brought forward most recently, it was the right scale. But more than that, it was well designed. So they put money through to all benefits. So not just universal credit, but all those other benefits which were left out in the pandemic. They put it through as a grant in the summer and then another one in the autumn. So you're not waiting until the autumn and they put extra money towards through non means tested benefits to pensioners and disabled people - two groups who we know face high costs, and where there can be quite low take up of the means tested benefits. And of all the money they spent, the majority went to people on low incomes, which was not the case, in February, they spent £18 billion pounds, two thirds of which went to help people in the richest half of the country. But this time around, they actually got it right.

I think the challenge, though, is that it is all temporary measures. So it is a temporary package for this year basically. What we haven't got yet is a sensible conversation about when we get to next year, how are we going to put Social Security on a sustainable footing that protects people, that doesn't require you to keep coming back with an emergency budget every time inflation goes up? I think that is the conversation now. And what are the longer term changes we can make, like insulating people's homes, so that we reduce energy costs, reducing our dependence on volatile gas prices for heating, sorting out the housing market, so rents aren't pulling people into poverty, getting better quality jobs, it’s that kind of strategy we need now, no sign of any of that, really. But the temporary care package for this year, pretty much hit the mark.

Mubin: So maybe a ‘B’, a ‘B+’  for these temporary measures and an  E for these longer term measures and I suppose that's the next element really, particularly the two bits you've just highlighted there - one the housing market and linked to that, home insulation which would be great for jobs as well. So there’s win wins here for the government.

Helen: There is, and we had their energy efficiency strategy, which has some good stuff in it, but was very underwhelming on things like home insulation. Things like onshore wind, is one of the things that you can do quite fast, much faster than building new nuclear power stations, for instance, onshore wind, you can do it pretty quickly. And actually, public polling is quite positive about onshore wind, whereas fracking, public polling remains really negative about fracking. So, if you want to diversify our energy quickly, onshore wind is a much better bet. But the government seems very reluctant to go there.

Mubin: Is it just simply cost, because obviously these measures particularly fixing the housing market - home insulation less so - this is going to run into billions of pounds and it feels like quite an ‘un-Conservative’ thing to do in terms of, you know, we might have to raise taxes etc to pay for this or borrow money or are there other factors at play here?

Helen: Cost is definitely part of it. But I think it's also, it's the lack of a coherent vision or strategy for how do you reshape the parts of our economy, which are producing these problems. So I think, there are parts of the Conservative Party, who are really on board actually, with different elements of the solution. But what we don't have is a coherent sense of here is a strategy with a number of different bits in it, that can command enough support from across the whole party to get through. And obviously, at the moment, you've also got a government that is lurching from crisis to crisis, and doesn't really seem to have the capacity to do strategy right now. And you've got a very divided party, one of the challenges not just for this conservative leadership, but potentially for the next one is they've got an electoral coalition, that is, it has very different needs in different parts of the Conservative Party. So actually, it's quite hard to see what's the policy pathway that you can unite the party around and therefore get put through as a sustainable programme for government.

Mubin:  Yeah, it's ‘invest to save’ programme isn't it? You know if you put in the capital that's required now, a bit like we did with the National Infrastructure Commission, which was a way of getting some much-needed funds in that's the sort of thing that you really need

Helen: You do and, you know, if you look at the kind of levelling up as the government's defining mission, you've got the levelling up white paper was, well parts of it were just a bit weird, but at the centre of it was actually quite a good articulation of what the problem is with regional inequalities. What it lacked, though, was the money. So actually, when you look at how much money is being spent on economic development in parts of the country that really need it, this government is spending less than its predecessor, Theresa May and David Cameron governments. So we have this kind of big ambition, quite a good framework, but it just doesn't have the backing from the Prime Minister or the Chancellor, which would lead to the money being put in which could make a serious difference.

Mubin: And we've got many other pressing issues which have got significant advocacy organisations behind them. So NHS, social care, we've got education - all of which need money so there's quite real pressing commitments on the government here aren't there?

Helen: Absolutely. And of course, all these things are connected. Because if you have high levels of poverty, that also drives ill health, and it drives problems in education, and it drives people who are reaching the time of needing social care with more health problems and fewer savings, and not owning homes and so on. So it is, you know, poverty is one of these things that if you take any national problem, it is very likely that having high levels of poverty is making it significantly worse and more expensive to fix. But, it does take money to change that. But it also takes changing structures, changing the labour market things like with housing, it is partly putting money in, but it's also actually taxing housing wealth. So one of the interesting things I saw the other day, the proportion of the UK housing wealth that is contained within second homes, either buy to let or second homes, has doubled in the last 10-15 years.  So that's one of the things, its pumping up housing prices, the fact that you have so many buy to let, and second homeowners. And because we don't tax housing wealth, really, it means that it is very attractive for people to speculate on higher housing prices. So actually changing those things could start to change how the housing market functions. But you know, that doesn't take a lot of money, it takes political will.

Mubin: And if you had one thing you could change, out of all the ideas that you've mentioned, that might be something completely different, what would it be? What's the one policy idea you have to improve living standards?

Helen: So actually, one of the ideas that I've been hearing a lot is not specific policy, but it is how we do policy. If you could make it so that the default at every level of government was that you designed policies with the people they were intended to benefit and interact with, I think that could kind of create a ripple effect across different policy areas. So,  you know, if you took Social Security, if we design Social Security Policy with people who were on Social Security, you could get a far more efficient, effective system. And I think as an approach that would make a big difference across a whole range of policy areas.

Mubin: Well, thanks very much, Helen. That was brilliant. I feel as if you should be in the cabinet really, in terms of making some of these decisions or bashing some heads together. So thanks very much for your time.

Helen: It's lovely to talk to you.

Mubin: Tune in for our next episode where we’ll be joined by Miatta Fahnbulleh from the New Economics Foundation to explore how inflation reached a 40 year high and why its hitting those on the lowest incomes the hardest.

Until then, thanks for listening