Dealing with the Cost of Living Crises: Jobs, Wages, and Broken Markets
A dynamic market economy, with profitable private sector companies is essential for creating the wealth we need.
But markets always have rules.
The question is: what do those rules allow?
And what do they encourage?
Do they encourage companies to create high-skill, high-wage jobs, as part of a race to the top?
And provide the support they need to do so?
Or do they encourage a race to the bottom of low wages and low skills?
Do the rules mend broken markets?
Or allow some firms to take advantage of broken markets at the expense of everybody else?
All governments set rules for what they want to see.
This Government does intervene in markets but in the wrong way.
They make it easier to fire people.
Water down rights for agency workers.
Turn a blind eye to the failure to pay the minimum wage.
Pushing companies to compete on low wages, low skills and worse terms and conditions.
They introduce tax cuts for the richest.
Defend bonuses for the bankers.
Stand up for a powerful few.
Supporting their belief that wealth will trickle down from those at the top to everybody else.
Don’t believe it when they say they are stepping away, they are stepping in all the time, stepping in to stand up for the wrong people.
High hopes for those at the top.
Low expectations for everyone else.
A race to the bottom.
When what we need is a race to the top.
Dealing with the Cost of Living Crisis: Jobs
To win that race to the top, we are going to earn and grow our way out of this cost of living crisis.
Not by spending money we don’t have.
Because we have to bring the deficit down.
But by building a different kind of economy.
One that really works for working people.
That starts with the jobs our country creates.
David Cameron is still on his lap of honour.
To celebrate how brilliantly he has done.
In the slowest recovery for a hundred years.
We still face a massive challenge of creating jobs in this country.
There are still nearly two and half million people unemployed in Britain and nearly a million young people are still looking for work.
And when we look at the jobs in our economy, too many are low paid, part-time and temporary.
Half of new jobs have been in low paid sectors of the economy.
We have 1.4 million people working part-time when they want full-time work.
More than ever before.
And we’ve got more people in a temporary job because they can’t find a permanent one.
The Tories don’t think we can do anything about it.
They think it is the way we compete with China and India.
But they are wrong.
A Labour government will put all our country’s effort into winning a race to the top.
And that means taking action on both the quantity and quality of jobs that we are creating.
We can only win a race to the top if we transform our vocational education system and apprenticeships in this country, which is what we will do.
We can only win a race to the top if we radically transform the way we support business in every part of our country, with a proper regional banking system learning the lessons of Germany, which is what we will do.
We can only win a race to the top if we support the small businesses that will create the jobs of the future, by cutting business rates, which is what we will do.
We can only win a race to the top if we help parents get back to work and start earning to support their families by extending childcare for working parents to 25 hour a week, which is what we will do.
And we can only win a race to the top with a proper industrial policy, including for environmental jobs, which is what we will do.
All this is about re-engineering the British economy so that we make a difference to the kinds of jobs we create.
You can’t do it if you believe in a race to the bottom.
You can only do it if you believe in a race to the top.
Dealing with the Cost of Living Crisis: Wages
So dealing with the cost of living crisis starts with jobs.
But it is also about wages.
Wages for millions of people have been in decline for far too long.
I am talking about people battling to do the right thing and struggling and struggling.
Hard, honest work, in supermarkets, on building sites, in call centres.
Working harder, for longer, for less.
We have a low pay emergency in this country.
Five million people now paid less than the living wage.
Working for their poverty.
Up at least 1.4 million in just the last four years.
To one in five of all employed workers.
More of Britain’s poor children today are being brought up in working families than in jobless families.
And low wages aren’t just bad for working people.
They cost money in benefits too.
As the country has to subsidise more and more low paid jobs with higher and higher tax credits and benefits.
The government now pays more out on tax credits and benefits to those in work than it does for who are unemployed.
So to those who say we can’t afford to do anything about wages in our country today:
I say we can’t afford not to.
And many businesses now recognise that a low pay economy is bad for them too.
I was in Bristol last Thursday night talking to cleaners who are paid the living wage.
They told how proud to work for a firm like that.
Better pay means lower turnover of staff.
So we have to end the scandal of poverty pay in this country.
We would strengthen the minimum wage, which has lost 5 per cent of its value under this government.
We are looking at the case for higher minimum wages in particular sectors of the economy, like financial services, where they can afford to pay more.
And we will go further than that too.
That is why the next Labour government from its first day in office, will offer “make work pay” contracts to employers all over Britain.
It is a simple deal.
For the first year of a Labour government, we will say to every firm:
You start to make work pay, through a living wage.
And we will give you a 12 month tax rebate of 32p for every extra pound they spend.
Make work pay contracts will raise wages, keep the benefit bill down and tackle the cost of living crisis.
It is a good deal for workers, business and the taxpayer too.
And by tackling low pay we won’t just strengthen our economy, we will strengthen our society as well.
It is not good for our country for people to be working 60 or 70 hours a week, doing 2 or 3 jobs, not having time to see their kids.
We will change it.
Under a One Nation Labour government: work will pay.
Dealing with the Cost of Living Crisis: Broken Markets
And tackling the cost of living crisis is also about ensuring markets work for working people.
And that means fixing markets when they are broken.
This power station was built in the 1920s after a Conservative government intervened to fix a broken energy market.
That government, of Stanley Baldwin, knew that if government didn’t fix broken markets, nobody else was going to.
Stanley Baldwin knew it.
John Major seems to understand it.
But David Cameron doesn’t.
His response to Labour’s energy price freeze shows how out of the mainstream he is.
He took issue with the whole idea of government intervention in a broken market.
Ever since, on energy he seems to have had a different policy every day of the week.
But what we know is that we can never expect him to stand up to the energy companies, because they are a large and powerful interest.
It is not who David Cameron is.
It is not what he does.
He stands up to the weak, never to the strong.
For the next eighteen months, people will hear scare stories from the unholy alliance of the energy companies and David Cameron.
The Big Seven.
It will just reinforce in people’s minds who he stands up for.
The six large energy companies.
Not the 60 million people of Britain.
Today, new figures confirm that most of the recent price rises weren’t caused by government levies or by a rise in wholesale prices.
But are the direct result of a broken market.
For the average increase in the price for electricity and gas since 2011, over half went straight to the costs and profits of the companies themselves.
This shows exactly why we need a price freeze now.
Because only a price freeze will protect customers while we re-set the market.
A price freeze until 2017 will happen if Labour wins the election.
A freeze that will benefit 27 million families and 2.4 million businesses.
It is workable and it will happen.
And tomorrow, Parliament will vote on that price freeze.
So Conservative and Liberal Democrat MPs could vote for it now.
And if they line up against it, the British people will know the truth:
This Government is on the side of the big energy companies not hard-pressed families.
And our price freeze until 2017 will pave the way for us to radically improve the energy market for the long term.
We will publish an Energy Green Paper for:
A regulator that can cut unjustified price rises.
A ring fence between the generation and supply businesses of the energy companies, so there is proper transparency.
Forcing energy companies to trade the energy they produce in the open market.
And a new simple tariff structure that people can understand.
So we will change the way the energy market works.
In a way that will provide long-term confidence for investors and a better deal for consumers.
And we will mend other markets that aren’t working in the public interest.
Opening up competition in banking.
A cap on the cost of credit in payday lending.
Proper regulation of our train companies.
Ending unjustified charges and fees in the private rented sector.
And new social tariffs in the water industry.
The Conservative Party defends broken markets and the few people that profit from them.
I am proud that the Labour Party stands up for markets that work for working people.
The next general election will offer a big choice.
A choice about whether we tackle the cost of living crisis or shrug our shoulders.
A choice about whether we run a race to the top or a race to the bottom.
A choice about whether we reform broken markets or defend them.
A choice about how we succeed as a country.
Above all, the choice will be about who our country is run for.
There is a Tory vision for Britain that has low expectations for what most people should be able to expect.
Payday lenders can prey on the vulnerable.
Millions of families see stagnating living standards.
Energy companies can just carry on as they are, ripping off consumers.
My vision is different.
We can run Britain in a different way.
Different from the past.
Building a different future for our country.
Where ordinary people feel the country is run for them.
In their interests.
And for their future.
Earning our way to a better standard of living.
Sharing rewards fairly.
And making markets work for people, not the other way round.
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