The cost of living crisis

British households have been left thousands of pounds poorer than their European counterparts by fifteen years of relative decline and high inequality, Torsten Bell tells the Committee Corridor podcast, exacerbating the pressure felt in the cost-of-living crisis.

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In his debut as podcast host, Darren Jones MP speaks to the Chief Executive of the Resolution Foundation, Torsten Bell, before turning to Select Committee Chairs, Caroline Nokes MP (Women and Equalities) and Sir Stephen Timms MP (Work and Pensions). This scene-setting episode questions the background to the cost of living crisis and highlights key topics for the podcast series, which will run Thursdays fortnightly until Christmas.

Resolution Foundation chief, Torsten Bell argued that long-term real-wage stagnation and a convergence between the incomes of the poor and the middle had left UK households more exposed than those on the continent.

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Transcript

Darren Jones: Welcome to Committee Corridor, the parliamentary podcast that takes you out of the House of Commons Chamber and upstairs to the Select Committee rooms. Here, Members of Parliament from different political parties join forces to unpack some of the biggest issues facing us today. Select committees are independent from government. This gives us a unique point of view. We make recommendations based on the evidence we receive from you and the government must respond. The big issues, the big thinkers, and the big ideas required to solve them. I'm Darren Jones, Chair of the House of Commons Select Committee for Business, Energy, and Industrial Strategy. I'm the Member of Parliament for Bristol North West. I'm delighted to accept the baton for this second series from Tom Tugendhat.

What's in store? Well, there's no getting away from the cost of living crisis. In a moment, we'll be joined by the chairs of the Work and Pensions and Women and Equalities committees. Caroline Nokes is Chair of the Women and Equalities Committee, which holds the government to account on equality, law, and policy. Caroline is a Conservative MP representing Romsey and Southampton North. Sir Stephen Timms is the Labour MP for East Ham. He chairs the Commons Work and Pensions Committee, which recently called for a more agile social security system which can adapt to turbulent economic times.

First, I want to set the scene for our Cost of Living series to understand more about how we got here and how we might deal with it. Torsten Bell is Chief Executive of the Resolution Foundation, an independent think tank focused on improving the living standards of those on low to middle incomes.

So, Torsten, thank you for joining us today.

Torsten Bell: Good to be here.

Darren: We've talked about cost of living crisis in the past. Is this just another one or is there something unique about the cost of living crisis we're facing today?

Torsten: Well, the scale of what's happening this year is definitely not just another year in a long list of difficult years for British households. The scale of the energy rises, as we've been surprised by right the way through this year, has been higher than people were expecting but it's like nothing we've seen in any living memory. That's true for households, it's also true for businesses seeing very fast rises in energy prices, and that's proving, obviously, a big challenge, not just for people, but for policymakers, both at the Treasury and at the Bank of England.

Darren: That's why, presumably, the government's announced a huge intervention on energy prices. Do you think that intervention will just deal with the cost of living crisis, given that that seems to be the main driver of it?

Torsten: One of the really depressing things about the current world is that, obviously, we can't deal with the cost of living crisis because it's being driven by us being poorer as a country because we're an energy importer and energy's become more expensive, so really, what we're doing is deciding who is going to bear the burden of that and when, and what are government's package, which is a very, very large package capping energy bills at 2,500 for the typical energy user household this winter, will make a really big difference, but it will also not prevent it being a really difficult winter because for lots of households, their energy bills for still being near doubling from what they'd been used to before this energy crisis kicked off. Obviously, the flip side of us all receiving a lot of protection for our household finances is that public finances are taking the strain.

Darren: We don't yet know how the government plans to pay for the energy intervention. We're assuming it might be levels of debt. Does that make it easier or harder for us to deal with during the cost of living crisis?

Torsten: We're choosing that future taxpayers will bear more of that pain rather than today's billpayers, so that does mean higher borrowing today and it means lastingly higher debt into the future. I think that's a reasonable thing for a government faced with a huge cost of energy increase, a good chunk of which-- [sound cut] [inaudible 00:03:54] how much, but a good chunk of which is probably temporary, so a significant amount of borrowing to help us through that winter I think is reasonable.

What we're not doing, though, is having a serious conversation about, yes, we need to borrow a lot, but are there things we could do to minimize the ask on future taxpayers but also to minimize the pressure on the Bank of England to respond to what the Treasury is doing by borrowing really very significant amounts, well over £100 billion probably, what that means in terms of higher interest rates. It's by going ahead with a policy that looks pretty similar to what the government is doing, which was always inevitable by the time we'd seen wholesale prices spike so high over the summer, but then, doing what's necessary to minimize the downsides of that.

Darren: What does this mean for workers? We've just started to look at the labour market in the UK on the Select Committee. We know there are lots of vacancies in the economy, relatively high levels of employment, how will this crisis affect the labour market, do you think?

Torsten: Well, there's good and bad news for workers. The good news right now is, as you say, we have a tight labour market. There are still quite a lot of vacancies. The numbers are starting to now come down but there are still very high vacancy levels given very low levels of unemployment. That tight labour market is to some degree, translating for lots of workers, not for all but for lots of workers into higher-than-we-are-used-to pay rises, which are now settling in the 5% a year level. We maybe haven't seen that for quite some time. Unfortunately, that's nominal wages but real wages, which is what our wages can actually buy in the shops, are obviously falling even though we're seeing faster than normal nominal wage rises.

That's because the high inflation that high energy prices have given us, and that's obviously bad news because it's making us all poor, and that, again, is about this big discussion about how we're deciding who's bearing the cost of higher prices this year. Obviously, then the longer-term bad news of that is that because the Bank of England thinks we need quite a significant loosening of the labour market to prevent permanent higher inflation becoming entrenched, they're saying to us, "We need to get the unemployment level up. We need to get it up to near a 5% rather than its current low levels," and that's what higher interest rates are aiming to do.

Darren: So we need more people to lose their jobs.

Torsten: Yes. The Bank of England is not saying it's good that more people are losing their jobs, but it's saying our job is to control inflation and the current levels of low unemployment aren't consistent with that.

Darren: Presumably, these pressures are underpinning the increasing number of strikes that we're seeing across the country.

Torsten: One of the things that I think that's missing from the public debate is just understanding that when you have an energy price shock leading to high inflation because that is just a big national discussion about who gets poorer and by how much, it's totally inevitable that a period seeing those energy price shocks is also one where you see large numbers, not even large numbers, larger than we are used to. The absolute numbers are still pretty small in our economy, but larger numbers of strikes as people contest the split of that pain between workers and between their employers.

Darren: Ministers often say the challenges we're facing in the UK are being faced in other countries around the world. It's about the Russian War and Ukraine, it's about coming out of the COVID pandemic, it's about inflationary pressures across the world. How valid is that argument?

Torsten: In terms of the big picture, what is causing today's pain, then obviously, it's correct that lots of countries, particularly European countries, are facing similar shocks from the energy price rises, and that's obviously because we are more dependent. The European gas market is more dependent on Russian gas than the rest of the world, and so the increase in gas prices is more acute here because of the cost of getting gas from elsewhere means that the US, for example, is seeing some higher gas prices, but it's nowhere near as acute as we are facing in Europe.

Then within Europe, to some degree, we are facing slightly higher pressures on energy because we use a lot of gas to generate our electricity. That's the big distinguishing feature. It's true, we don't actually directly import a lot of Russian gas, ours mainly comes from Norway, but that doesn't matter within a European gas market as a whole, as prices have risen, we do consume quite a lot of gas for electricity generation, so that's why we're seeing somewhat higher energy price increase than some other countries.

I think, big picture, the short term isn't that different here compared to the rest of Europe. I think what is different is that we are coming into this crisis on the back of 15 years of really disappointing economic performance. We've been in relative decline versus most large European countries during that phase, definitely compared to the United States. That means that, for example, workers haven't seen a real terms pay rise in 15 to 20 years. Then on top of that, you're asking them to bear big living standard pressures now, but they haven't got a lot of margins to adjust.

Poor households have been getting poorer for quite some time, and they've already had to increase the percentage of their budgets that they spend on essentials like energy, like housing, and so they don't have lots of luxuries they can now cut when this new crisis comes along.

Darren: The new Prime Minister, Liz Truss, the new Chancellor, Kwasi Kwarteng, former Business Secretary, have said economic growth is at the heart of their agenda. After 12 years of being in government, after austerity, Brexit, albeit COVID was an unwelcome addition, Liz Truss has said tax cuts are the way to get the economy moving. What evidence is there to suggest that's the correct approach?

Torsten: Focusing on growth is definitely the correct approach. I think it's become a bit too fashionable on the left and the right to say that growth is not even something we should be aiming for. On the left, that's sometimes because people think that a lack of growth is the best way to deal with our net zero or climate ambitions, and on the right, it's because some people are less fussed about growth these days. Mainly, lots of voters are older and aren't working and so their income isn't dependent on what the labour market and the economy is doing.

Then John Redwood told me the other day that we didn't need to do any trade anymore because it was good to produce all our food domestically and it didn't really matter if that made us poorer. I think there's an issue which is, generally, a lot of people have become weary of growth. A lot of people say, oh, growth doesn't feed through into ordinary workers' living standards anymore, so we shouldn't even aim for it. I think it's really important to understand that is not true.

The reason why wages have not been growing in the last 20 years is because of two factors. One, we haven't had any growth or very little growth, and two, because we've had high inflation in two bouts, including driven by sterling depreciating during the financial crisis and after Brexit, and now again, to date. We do want growth. It does matter people's living standards, the government's right to focus on it. A focus narrowly on tax cuts as your growth strategy is unlikely to deliver lasting effects on growth.

In terms of you providing a big fiscal impulse, big fiscal support, extra borrowing to support households this year, that will make some difference to short-term growth but that will dissipate quickly because the Bank of England in response will push up interest rates faster than it otherwise would have done to make sure that growth doesn't last. The overall size of your economy isn't permanently increased by those kinds of tax cuts unless it leads to changes in investment by businesses or the number of people that are in work, or how productive they are.

If you look across the world, there's no strong evidence that lower taxes lead to faster growth rates. Almost all of the countries that perform better than us in Europe, higher growth in the recent past, higher levels of productivity, higher living standards, actually have slightly higher tax rates than we do. Big picture, the role of tax in determining growth in both directions actually, because some people say, oh, if we have higher tax rates, that will also boost growth. I think people on both sides if they want to see growth need to focus a bit less on tax.

Darren: Is there any evidence to suggest how Brexit is affecting the cost of living crisis?

Torsten: Brexit is not the underlying driver of the cost of living crisis which is, as we say, the global spike in gas prices, in particular, and some of the unwinding from the pandemic which has obviously affected global supply chains, particularly for goods, which is mainly driven by just very strong demand in the United States sucking in lots of goods and pushing up their global prices but it's also driven by supply chain difficulties.

If we step back to what can we see from Brexit overall, I'd say what we're seeing is not exactly what was expected at the time of the referendum where people were very focused on saying, oh, this will mean a lot less trade with Europe in the short term, particularly exports to Europe. What's instead happening is that Britain is just becoming a less open economy with regard to everybody in the world.

We're doing less exporting, less importing more generally, not just when it comes to Europe, and in the long run, that is a route to being poorer as a country because lots of the drivers of living standards growth over the last few decades are associated with the openness of our economy. It doesn't mean you want to be open on every single aspect, and clearly, there's big trade-offs, as our farmers are now pointing out with regard to the trade deal with Australia.

The big picture of becoming a less open economy that making us less specialized, maybe doing some kinds of-- For example, if we look at manufacturing, I think a lot of people hoped Brexit would lead to a manufacturing boost, but the kinds of manufacturing it looks like it will see more workers doing is food manufacturing, which is obviously low productivity, low pay. Food trade barriers tend to lead to bigger shifts in production. We'll do more agriculture in the UK, we'll do more food manufacturing, but these are pretty low-productivity low-paying sectors, and overall, what it does is make the country poorer.

Darren: You've recently said that in the UK, we have a toxic combination of low growth and high inequality. The government's talking a lot about growth, in my view, maybe not so much about inequality. If you had an elevator pitch with the new Prime Minister, what should she be doing on inequality?

Torsten: Well, I think the big picture is the two together, Britain's had high inequality. We've got the highest inequality of any large European country, has had that consistently, broadly since the 1980s and the early 1990s, and then we've since in the last 15 years, or more recently, we've combined that high inequality with very low growth rates. It's not over the top to say we have been in a period of relative decline where other countries have pulled further ahead of us. The two together, they're not toxic for the top, for the richest household.

Britain's richest households are still on a comparable level of living standards with the countries where you would broadly consider us similar to Australia, Canada, and the Netherlands, Germany. The rich are not worse off than the rich in those countries, but the middle and the bottom are much poorer than those countries, much poorer than people normally appreciate. If you took the average of those five countries and, if you include France, then the middle household is £8,800 poorer than those countries. That is because of low growth and high inequality, meaning that the middle receives less of the pie in the UK compared to those countries.

My overall pitch would be, it is the combination of the two that is really, really hammering middle-income and low-income Britain. If you get growth up, that is really important, and you shouldn't listen to people that say to you that doesn't matter, because it does matter for the middle and the bottom, but if you don't also get inequality down, you will still leave middle and low-income Britain far behind those other countries, and that shouldn't be what a thriving democracy looks like in the 21st century.

You need a benefits system that supports those at the bottom who won't be lifted by growth automatically, and you need a labour market that provides rising wages, not just at the top where we do have high rewards in the UK, but for the middle too. Because the minimum wage is obviously helping at the bottom, we've actually seen hourly wage inequality fall at the bottom and catching up with the middle, but what we haven't seen is that the middle doing particularly well, and that's going to take a renewed focus on what a decent labour market looks like.

Darren: Lastly, how long do we think the cost of living crisis is going to go on for?

Torsten: That's a million-dollar question. It's now impossible for it to be done or even to be easing significantly by the spring of 2023. You can live in hope that if the energy markets see that Europe can cope with significantly reduced energy imports over the course of this winter, then these spikes that you've seen over the summer of wholesale gas prices which are really people panicking that we can't cope without very significant shutdowns, could ease. We should see inflation at least falling back in the second half of 2023.

Obviously, there are other things going on, though, which is, at some point, these rises in interest rates which are now markets are pricing in not just very large individual countries but coordinated large interest rate rises right across the developed world on a scale that people, if you'd asked them a year ago, would've thought was completely impossible. Those will start to translate into slowing economies, which are also being slowed by those higher energy costs, and so it will move from a direct price cost of living crisis to a slowdown in labour markets and that will translate into lower wage growth and higher unemployment.

That will tend to lead to a more concentrated pain, particularly if it's energy and it's essential, shared out across the population, and hurts the poorest in particular. If it moves into a labour market size of pain, then it's obviously those losing their jobs who bear that in a concentrated fashion.

Darren: Torsten Bell, thanks for joining us.

Darren: I'm now joined by two parliamentarians to take a closer look, at the issues which Torsten Bell has just been setting out for us. Caroline Nokes is Chair of the Women and Equalities Committee, which holds the government to account on equality, law, and policy. Caroline is a Conservative MP representing Romsey and Southampton North. Sir Stephen Timms is the Labour MP for East Ham. He chairs the Commons Work and Pensions Committee which recently called for a more agile social security system which can adapt to turbulent economic times.

Sir Stephen, Torsten Bell just gave us some good and bad news for workers. He said that low levels of unemployment aren't consistent with keeping inflation down and that we should expect more people to lose their jobs. Is there sufficient support in the system for people that find themselves in those circumstances?

Sir Stephen Timms: Well, there is an obvious worry at the moment about the prospect of unemployment rising over the next few months, and so we are setting out on an inquiry on the government's plan for jobs and on the support which is provided for unemployed people at the moment. There was a lot announced early on in the pandemic. Unemployment at that time didn't rise as much as was expected. Some of those interventions are still around, so we're going to be having a look at whether what is going to be available in the next year or two is going to be up to the job that we are going to need it to do.

I think there is potential to significantly improve support, particularly perhaps for people who are out of work on health grounds. We think there's more that can be done there, but we will be looking at the position across the board and hopefully, be able to make some recommendations to the government about improving it early in the new year.

Darren: Presumably, Stephen, you're worried about the scale of the demand for support for unemployment services. We've had very low levels of unemployment for quite some time now. Are there just enough people and access points for workers across the country to access?

Stephen: Well, there was a big increase in the number of people working in job centers for the pandemic, that's now been scaled back, but presumably, that means that the Department of Work and Pensions could quite quickly increase the number again if it needed to, having had that experience during the pandemic. I would hope that the department is going to be sufficiently agile to keep up with the demand which is likely to emerge quite soon now.

Darren: Caroline, it's early days for your inquiry into the development of the government's National Disability Strategy, which was published in July 2021. The former Prime Minister, Boris Johnson, pledged to tackle the disadvantage faced by the 14 million people in the UK with disabilities. Will you be looking at the cost of living crisis as part of the development of the National Disability Strategy?

Caroline Nokes: Well, we certainly saw during the pandemic that it was particularly disabled people, it was Black, Asian, and people from other minoritized ethnic communities who were disproportionately hit, and also, there was a gendered economic impact so I think there are some parallels that could be drawn. I think my primary concerns are around disabled people who may well be reliant on particular equipment that is energy-intensive, people who are on medications that have to be kept at certain temperatures. I think that's a real worry, but it's also the elderly, those who are home all day needing to be able to heat their homes, who may well really feel the energy crisis impacting them.

I think there are some interesting questions around women and there is no specific reason instinctively why women should be impacted more than men. I would argue that it is women who have been right at the front line of noticing the cost of living crisis creeping up on us. We know that food bills have gone through the roof, and although it is a stereotype that grieves me, we did learn during the pandemic that it was women who were picking up the greatest share of household chores. They were the ones who were going out and doing the shopping in the supermarkets, and it is female constituents who have been coming to me talking about the cost of ordinary groceries, the cost of their children's school shoes.

Everything has gone up significantly and so I think what the pandemic taught us is that you have to be aware of the different impact on different communities. You have to be aware that some of us will ride out the cost of living crisis without noticing much impact, whereas there will be families in all of our constituencies who really do feel that when they have to turn the heating down by a couple of degrees, when they can't afford to be using their ovens to heat food, that they're literally looking at what they're able to cook in terms of not what's the most nutritious for their children, not what they like to eat, but actually, what's going to be the cheapest to heat up. You really do have to start worrying about how we can target support to those who are going to need it the most.

Darren: On that targeting of support, the report from your committee recently recommended that the government use more equality impact assessments when thinking about how they target support to people in the country. Did ministers take that on board?

Caroline: I think it would be fair to say there was a mixed picture. I can remember one minister, in particular, coming in front of my committee, I will name her, Jo Churchill, no longer in a department but a whip. Jo was very clear, absolutely adamant that you had to look very closely at equality impact assessments, that you had to understand your public sector equality duty, not treat it like some sort of box-ticking exercise. She really stood out as somebody who got it.

What I think I worry about is those ministers who want to suppress equality impact assessments, those ministers who are in some way scared to share their findings with us because actually, we need transparency, we need openness. I hope that the new government and the Prime Minister will have an attitude towards sharing that information, letting us all see where the impact of policies are going to fall and enabling us as select committees to perhaps scrutinize very carefully those impacts and give some pointers and recommendations to the government as to how they can mitigate them.

Darren: Presumably, those would be done by the Treasury, would they? The equality impact assessments?

Caroline: Yes. There are some done by the Treasury, but some done in department. That's the reality is that we need, across government, there to be what I would argue for is uniformity, that they all be carried out in the same way and published. Please let us see the outcomes of the work that we know is being done.

Darren: We know the work is being done, do we?

Caroline: Yes, I think we do. Yes, and I'm confident that equality impact assessments are undertaken where they are required. Of course, that's an interesting point, isn't it? That I would prefer to see assessments done against all policies, against all proposed legislation so we actually have a greater level of understanding rather than an attitude of, well, if we don't have to do this, we won't bother. Actually, let's understand what impact policies are going to have on people who are already the most marginalized in all of our constituencies.

Darren: Stephen, a report that you recently published on your committee was looking at the measures the government had put in place to try and help households with the rising cost of living. You raised some concerns, particularly around the safety nets that people rely on. Presumably, you share some of Caroline's concerns then.

Stephen: Yes, I do. Our report was published in July. One very short-term measure we argued for, which unfortunately the government has rejected, was that the current deductions from Universal Credit, an awful lot of people claiming Universal Credit are not getting the full amount of benefit because they're repaying an advance or a tax credit debt, or something. We said the government should suspend those deductions for the time being.

They did that during the pandemic and lots of people commented that that made an enormous difference to helping hard-pressed people get through a very difficult period. We think we're in the same position again now, that it should be done again. The government has so far declined to do that, but I hope they will think hard about that over the next few weeks.

We raised a number of other points in our report. We pointed out for example, that at the moment, Universal Credit and other benefits are uprated in April in line with the previous September's inflation figure. That meant last April the uprating was 3.1% at a time when actually, inflation by then was around 10%. We say that the government really should come up with a smarter and quicker way of using the data to keep benefits uprated sensibly.

We also pointed out about the benefit cap. The benefit cap was introduced 10 years ago. It's only ever been changed once and it was reduced in 2016. When it was first introduced, it was supposed to make sure that households didn't get any more in benefit income than a medium-earning household would expect to receive. After all these years, with no change at all in the benefit cap, other than to reduce it in 2016, that level now bears no relation at all to earnings or anything else really. With inflation at the current level, if the benefit cap is not uprated next April, we are going to have terrible problems for a very large number of households as people's benefit income crashes into the cap and is reduced as a result.

We said the government ought to look at the overall level of benefits because they are historically at a very low level at the moment. We also queried why the government has put £1.5 billion into the Household Support Fund to be handed out by local authorities. That may be a helpful thing to do, but if there's a couple of billion pounds there, maybe it would be better to put it properly into the mainstream social security system rather than handing it over to local councils.

Darren: Stephen, the former Chancellor, Rishi Sunak, said that he couldn't tweak the payments very often because of the IT system. Did you look at that on the committee? Is that right?

Stephen: Yes, we did and I think he's right. The problem is not with Universal Credit but the older system which a lot of people are still receiving benefits from, people still getting employment support allowance, jobseeker allowance. Those legacy benefits are run on creaking IT systems and we said during the pandemic that they ought to be upgraded so that there could be a smarter, quicker uprating arrangement. With Universal Credit, of course, Rishi Sunak increased it, absolutely rightly, by £20 a week overnight at the start of the pandemic, so there's no problem in uprating Universal Credit quickly but it's the older benefits where there is a problem, and unfortunately, it has not yet been fixed.

Darren: Caroline, there's obviously been a debate going on recently about whether benefits should be uprated to match inflation. What's your view on that question?

Caroline: Look, I'm very much with a number of members of the Cabinet who have made their views clear that it is not advisable, I think, to give with one hand, for government to look at that energy package that it is giving to people who are in the most need to support their energy bills in the cost of living crisis, and effectively to take away with the other hand, by not uprating benefits in line with inflation.

We are all impacted by inflation so I think it's absolutely imperative that the government understands. They've given support for energy, but they also need to give wider support with every other area of the cost of living that has increased, and whether that is food, clothing, transport, people need to be able to afford to get to work, they need to be able to afford to feed their families. I have said quite clearly I support those members of the Cabinet, including people like Penny Mordaunt, who have come out and said, "Yes, we should be uprating benefits in line with inflation."

Darren: I think there's agreement all around on that on this podcast today. Caroline, you've also announced an inquiry from your committee looking at the development of the government's National Disability Strategy, which was published in July. Former Prime Minister Boris Johnson pledged to tackle the disadvantage faced by the 14 million people in the UK that have some form of disability. How do you think the cost of living crisis will factor into your inquiry? Do you think the government sees it as an important part of its National Disability Strategy?

Caroline: Well, the Disability Strategy was launched with 100 immediate commitments for disabled people. I think the lens of the inquiry is to look at it and see, are they delivering on those commitments. Are they making life better for people with disabilities? The cost of living crisis, you have to be aware that there will be people with disabilities who are very high energy users, who are using electricity to charge up their powered wheelchairs, who are using electricity to have hoists and other specialist equipments in their own home allowing them to live independently.

What do we want for disabled people? We actually want them to be able to lead as independent and successful life as they possibly can. They need all of those adjustments and assistance, and that may well make them high-energy users. I think it's an inevitability that the cost of living crisis will give us a perspective on how well the National Disability Strategy is doing.

I think in addition to that, and I've discussed with my committee clerks that actually, come a new year, we should perhaps be looking at quite separate work on the cost of living crisis and how it has impacted all of those in disadvantaged groups and those with protected characteristics. I think that that's really important is that we get a very clear picture of exactly what is happening to people's lives. How they are being impacted, whether through employment, whether through their energy costs, whether it's their ability to feed themselves, to carry out their daily lives as they wish.

I think we have to be very concerned that a period of rising unemployment and rising bills at the same time is going to put a real pressure on ordinary families and pensioners, people with disabilities, on children, and on minoritized communities. I think it's critical that the committee steps up and has a look at that and makes some recommendations to the government as to how they can improve their performance.

Darren: Right. Finally, to both of you, you're both in a lift in the House of Commons, Liz Truss, the new Prime Minister, enters the lift, what would be your elevator pitch to Liz Truss? Caroline Nokes.

Caroline: My pitch to the Prime Minister is one of the frustrations I've noticed over the course of the past two years since I've been doing this job as Select Committee Chair is the inclination of government ministers to insist on looking at everything in the round. Actually, we have to be far more focused and targeted, and I would urge the Prime Minister to look at individual communities, look at individual protected characteristics, recognize that the cost of living crisis is impacting women, it's impacting people with disabilities, it's impacting the elderly, and not try and have a one size fits all approach to solving it.

Darren: Stephen Timms.

Stephen: I'd quote something the Archbishop of York said in his sermon at the church service at the beginning of the Labour Party Conference this year he said, "Increasingly, the safety net in our nation is a food bank where more and more people have to go to get what our economy itself fails to provide." We've got to fix that flaw. In the economy, the first thing I would do would be to abolish the five-week wait for Universal Credit, which I think really means that the Social Security system at the moment is not fit for purpose because you have to wait five weeks after applying for your first regular benefit payment.

If my elevator pitch can sort of extend over a rather longer period, I'd certainly suggest the Prime Minister should review the very historically low levels of the benefit we're paying to people at the moment. According to the House of Commons Library, support for an unemployed single adult without housing costs as a proportion of average earnings is less today than when Lloyd George introduced unemployment benefits in 1911. These are very, very low levels of benefit and we've got to uprate them.

Darren: Well, thank you both, Stephen Timms and Caroline Nokes, for joining us today.

The cost of living crisis is a serious issue affecting millions of people, businesses, and public services across the country. I hope you agree that Torsten Bell, Sir Stephen Timms, and Caroline Nokes have set the scene for some of the interesting discussions that we need to have in Parliament to try to help our constituents and communities across the country. We'll be picking up these issues in future episodes, on jobs and on the workforce and on the energy crisis. We'll also consider the impact of the UK's climate pledges on the current crisis being faced domestically here in the UK.

You can listen to every episode of Committee Corridor, including catching up on our first season, wherever you get your podcasts, or visit us on www.parliament.uk/committee corridor. Subscribe so you never miss an episode, and if you've enjoyed it, review and leave us a recommendation. I've been Darren Jones, MP, Chair of the Business Committee, and you've been listening to Committee Corridor. Thank you for listening.

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