Rising underemployment is exacerbating the cost of living crisis

Under David Cameron working families are facing a massive cost of living crisis.  Yet his out of touch government is doing nothing to tackle this disastrous fall in living standards.

David Cameron’s cost of living crisis is being made worse by a surge in underemployment.  Underemployment is a large and growing problem for millions of families already feeling the pinch from rising prices. More than one in ten are now unable to work the hours they would like because this Government choked off the recovery. The real story of the labour market is falling wages, almost a million young people out of work and millions working harder for less.

330,000 more people are underemployed in the UK than before the election. According to research by the House of Commons Library the number of people who are in employment and willing to work more hours has risen from 2.81 million in 2010 to 3.14 million in the latest figures.  This means that more than 1 in 10 workers want to work more hours but can’t. Within that, the number of underemployed people with dependent children has increased from a million in Q1 2010 to 1.2 million in Q1 2013.

Yesterday’s Bank of England Inflation Report also highlighted the problem of underemployment, pointing out that the proportion of people working part-time because they can’t find a full-time job is higher than before the recession started. Working people and their families are being squeezed, with prices rising faster than wages.

We have also had the revelation this week that one million workers are on zero hours contracts, four times as many as indicated in official figures. For some people, it means they have no idea what their income will be from one week to the next.  Labour will hold a summit later this month to discuss this troubling issue and when the House of Commons returns we will take the first opportunity to call a debate and vote on the action that needs to be taken.

The underemployment problem highlights just how out of touch David Cameron’s Government is with the living standards crisis facing Britain’s hard working families.  As Labour pointed out this week, analysis by the House of Commons Library of the forecasts produced by the Office for Budget Responsibility shows that, after inflation, wages are forecast to be £1,520 lower in 2015 than in 2010. This means that working people will, on average, have lost a total of £6,660 in real terms while David Cameron has been Prime Minister.

David Cameron is out of touch.  His economic policies have failed, and working families are being left massively out of pocket.  Faced with these problems, his Government has simply given a large tax cut to the highest paid.  David Cameron stands up for the wrong people.  It’s time for him to wake up and adopt Labour’s plan to help working people – not keep filling the pockets of those at the top.

Stephen Timms is Shadow Minister for Employment