Unity of purpose

Over the next few years, the Labour government must pursue the mission of raising living standards and crushing the cost of living with an almost religious fervour. No voter, family or community should be left in any doubt that this government will clear any path, overcome any hurdle, and walk through any wall to put more money back in their pocket.

During the last Conservative-led parliament, living standards fell for the first time since the Victorian era. The Conservatives brought about this decline through a failure to tackle the root causes of rising prices from energy to housing and accepting our economy’s poor productivity, consistent cuts, caps and freezes to working age benefits, and, because of Liz Truss’ catastrophic leadership, a hike in mortgage rates that people are still feeling whether they’re renewing their mortgage or have fixed a new rate over the past few years.

The November budget was a pivotal moment – reducing the immediate pressures of the cost of living more than any other budget in living memory. Cutting energy bills by £150, freezing rail fares, and the fuel duty freeze will all provide short term relief to families across the country and take half a percentage point off inflation early in 2026 too. The chancellor’s removal of the two-child benefit cap will lift 450,000 children out of poverty – the largest reduction in child poverty within a parliament on record. All of this builds on the extension of free childcare and free school meals, the introduction of breakfast clubs, school-based nurseries, and the rollout of Best Start in Life hubs, not to mention another welcome increase in the minimum wage.

But we must be in no doubt that there is still much more to do over the course of this parliament. The Office for Budget Responsibility (OBR) finds that, in contrast to the last, Real Household Disposable Income (RHDI)will increase over the course of this parliament. But the increase will be small relative to previous parliaments since the second world war. Meanwhile, modelling by the Joseph Rowntree Foundation – using a measure that, among other things, takes account of housing costs – paints a bleaker picture.

Recent work by Labour Together underlines the necessity of focusing on the cost of living. Using a unique approach to assessing national priorities, it concludes that the British public’s primary concern is the high cost of living, which represents a “foundational, unifying “issue. Work by Ipsos, YouGov and the IPPR reinforces the importance of tackling the cost of living, with the IPPR finding that the public believe the government is both “to blame for, and responsible for ‘solving’, high prices. “In the public perception, the government is the chief cause of the high cost of living, ahead of Russia’s illegal invasion of Ukraine, Brexit or global trade wars.

The government could take inspiration from progressive leadership overseas. The IPPR point to action by both the Australian Labor Party and the French government. From pursuing small reductions in energy bills and student debt reduction to action on food prices, progressive governments abroad have shown that small actions across a range of areas can add up to a compelling picture for voters of a government relentlessly focused on their key priority – the money in their pocket

We need to replicate this, ensuring that tackling the cost of living is their political north star. A bold, long-term living standards strategy must sit at the heart of our plan for growth. This could include appointing a new living standards minister or setting up a new cabinet committee. The minister or committee could be charged with delivering the government’s living standards strategy, assessing new major policies against their impact on the cost of living, assisting departments across government in sharpening their focus on the issue, and helping with communicating the government’s action to improve living standards. With energy a top priority for voters, immediate action should be taken to build on the cut to energy bills in the budget. Since 2021, energy network companies have made around £4bn in excess profits, paid for by our constituents in their bills. These profits are not tied to performance or consumer benefit, but to higher-than-expected inflation, allowing companies to recover borrowing costs far above their real costs. Worse still, these windfalls are expected to continue. The government and the regulator Ofgem must bear down on these excessive profits and return the benefits to our constituents.

Whatever the political and economic challenges that we face at home and abroad, improving living standards must remain the guiding principle of this Labour government– both to stay true to our values and to demonstrate, in people’s daily lives, the real difference a Labour government can make.

Image Credit: Tim Witzdam via Pexels