When David Cameron entered Downing Street in 2010, he said that he wanted to see an economy where standards of living “rose steadily”. He promised to help working families with the rising cost of living.
What happened since has been almost a polar opposite — the rising cost of living has, for too many, become a full blown crisis. After inflation, working people in the East Midlands are an average of £1,404 worse off a year since 2010 and the projections show this is set to get worse.
Of course, lots of people I speak to in Lincoln, especially families, are all too well aware that it’s getting harder and harder to make ends meet – they’re having to make their money stretch further all the time.
Since Cameron became PM, Osborne likes to blame “rising global prices” for the rising cost of living, but inflation in the UK has steadily run higher than that of our G7 competitors. Indeed, inflation has consistently been above the Bank of England’s 2% target since May 2010.
Despite his promises, Cameron is already the worst Prime Minister for living standards on record. Prices have risen faster than wages in all but one month of his premiership, meaning he’s now presided over 36 months of falling real wages.
No Prime Minister since records began comes close to such an appalling record. By way of comparison, Heath oversaw falls in just 3 of his 45 months, Major 9 of 77 and Blair 12 of 122.
In the one month that wages did rise faster than prices for Cameron – April of this year – it was because bank bonuses soared to take advantage of Cameron’s tax cut for millionaires.
Distressingly, analysis of forecasts by the House of Commons Library shows that, with wages set to plunge further in the coming years, the average working person will have lost £6,660 in real terms by 2015 – enough to pay for the average family weekly shop for almost a year and a half.
The scale of the crisis is clear. But people rightly want to know what Labour would do instead.
First, fair taxes. Labour would help middle and low-income families immediately by reintroducing a 10p starting rate of tax, paid for by a mansion tax on homes worth over £2 million.
Rather than give millionaires a tax cut, Labour would protect the tax credits that help working families to make ends meet – rather than cutting them, as Cameron and Osborne have done.
Second, end the rip-off rail fares. Labour would apply strict caps on rail fare rises, remove the right for train companies to vary regulated fares by up to 5%, as well as introducing a legal right for passengers to get the cheapest ticket for their journey.
Third, to tackle the energy bills that just seem to keep on going up, Labour would force the big energy companies to use their profits to keep bills down.
We’d abolish Ofgem, replacing it with a tough energy watchdog with the power to force energy suppliers to pass on price cuts when the cost of wholesale energy falls, as well as requiring the energy companies to pool the power they generate and to make it available to any retailer which would open up the market and put downward pressure on prices.
We’d also tackle rip-off letting agents and curb payday lenders by capping the cost of credit.
All of these things would help ease the crisis, and the Tories would be well-advised to adopt every single one. Given Cameron and Osborne’s record though, I won’t be holding my breath.