London is increasingly facing a “humanitarian crisis”, Trust for London programme director Klara Skrivankova told the London Assembly today at a City Hall session about tackling the mounting cost of living pressures facing the capital.
“People will not be eating and will be cold in their homes. We need to wake up to that fact,” Skrivankova warned. “We have even heard from experts that there is a real risk of malnutrition, a really shocking thing to be talking about in London in the 21st century.”
The trust, a long-standing charity working on poverty and inequality in the capital, is now focused on humanitarian relief, she added, with £800,000 of funding recently agreed for emergency food packages and help with household bills.
The scale of the crisis was highlighted in stark figures presented to the meeting by Debbie Weekes-Bernard, Sadiq Khan’s deputy mayor for communities and social justice.
At the beginning of the year some 35% of Londoners reported that they were struggling financially, and that figure now stands at 53%, she said. The capital’s boroughs continue to have some of the highest rates of child poverty in the country, with one in five Londoners facing food insecurity, and half of those in poverty actually in work – a “grim baseline” according to Skrivankova.
The meeting took place as the Bank of England announced the largest interest hike since 1989 in the face of the highest and fastest rising, inflation rate in 40 years, alongside forecasts of a “very challenging” two-year recession already underway.
For London that would mean falling real wages along with higher mortgage rates, a slump in house prices of up to 10% and rising unemployment, economist Torsten Bell, chief executive of the Resolution Foundation think tank, told Assembly members (AMs).
“Very large income falls now look inevitable next year, particularly concentrated among lower-income households,” he said. “Many of us thought that as Britain got richer we would spend a smaller proportion of our income on essentials, and that was the story of the last 150 years. But that has gone into reverse in the last 15 years, with weak wage growth and the squeeze that imposes on household living standards the defining feature of the political economy. Britain is a too high inequality country, with too little growth.”
After a decade of austerity, tax will need to play a bigger role than cuts to public services, Bell said, as a “poorer” Britain faces choosing how to distribute the economic pain it is suffering, he said. And the focus should be on wealth, which has been “growing non-stop since the 1980s”.
Low-income households, already “getting absolutely stuffed”, should not see benefits downrated, he said, advising AMs advocating a trial of Universal Basic Income (UBI) schemes, including Liberal Democrat Hina Bokhari, that a better focus would be the continued freezing of housing benefits and the capping of support for larger families. “UBI is never going to happen. But those are choices in the benefit system that could be fixed. I’d spend more time on that,” he said.
Bell also had a warning – and a challenge – for those hailing the London economy as bucking the national trend. “On productivity, that is nonsense,” he said. “Growth is too dependent on more people working and working longer hours. There is far too much backslapping about London business and not enough realisation that we are not doing well enough. I don’t see much focus on boosting productivity coming out of the GLA or the Mayor of London. So why don’t you do that?”
Conservative AMs chose to focus on the impact of Mayor Khan’s plans to extend the Ultra-Low Emission Zone to the whole of London, charging drivers of vehicles failing to comply with emissions standards £12.50 a day to enter the city. The proposals amount to “£250 million spent on a camera network that will disproportionately impact the least well-off people who own cars,” said Neil Garratt, AM for Croydon & Sutton.
Weekes-Barnard responded that a scrappage scheme to help residents change their cars would be in place. “We are in a cost-of-living crisis, but we are also in a climate change crisis,” she added. “We shouldn’t be saying to Londoners we care about your costs but not about clean air.” Khan is expected to decide what to do next about the ULEZ by the end of the year.
Weekes-Bernard also confirmed that a City Hall online information campaign providing advice on cost-of-living help is underway, and that the Mayor will be launching a separate campaign encouraging take-up of Pension Credit shortly. Age UK London have found that some 40% of eligible pensioners do not claim the benefit.
The whole of the Assembly meeting can be viewed here.
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