Ed Miliband slams 'Tory-led' Government 'failure to tackle the cost of living crisis'

Ed Miliband will today declare that the Tories' failure to tackle the cost-of-living crisis has helped cost the Exchequer £116.5 billion - leading to higher borrowing and broken promises on the deficit. The price tag, equivalent to almost £4,000 for every taxpayer, is based on new research from the House of Commons Library being published by the Labour Party. This shows that low pay and stagnant salaries, combined with soaring housing costs and the failure to tackle root causes of increased welfare bills, means that over the course of this Parliament:

• Income tax receipts have fallen short of forecasts by more than £66 billion.
• National Insurance Contributions are £25.5 billion lower than expected.
• Spending on social security is £25 billion higher than planned.

In opening remarks to a Q & A event in Nottingham, Mr Miliband is expected to say the test for George Osborne in this week's Autumn Statement will be to set out a plan to build a recovery for working people - one which recognises the link between the living standards and Britain's ability get the deficit down.

He is expected to say: "For a very long time, our country has worked well for a few people, but not for everyday people. We live in a country where opportunities are too skewed to those at the top, where too many people work hard for little reward, where too many young people can't find a job or apprenticeship worthy of their talents, and where families can't afford to buy a home of their own. For all the Government's boasts about a belated economic recovery, there are millions of families still caught in the most prolonged cost-of-living crisis for a century. For them this is a joy-less and pay-less recovery.

"My priority as Prime Minister will be tackling that cost-of-living crisis so that hard work is properly rewarded again, so that our children can dream of a better future, so that our public services including the NHS are safe. Building a recovery that works for everyday people is the real test of the Autumn Statement. But that isn't a different priority to tackling the deficit. Building a recovery that works for most people is an essential part of balancing the books. The Government's failure to build a recovery that works for every-day people and tackle the cost-of-living crisis isn't just bad for every person affected, it also hampers our ability to pay down the deficit.

"Britain's public finances have been weakened by a Tory-led Government overseeing stagnant wages which keep tax revenues low. Britain's public finances have been weakened by Tory policies which focus on low paid, low skilled, insecure jobs - often part-time or temporary - because they do not raise as much revenue as the high skill, high wage opportunities we need to be creating. And our public finances have been weakened by higher social security bills to subsidise low paid jobs and the chronic shortage of homes.

"The result has been David Cameron and George Osborne missing every single target they set themselves on clearing the deficit and balancing the books by the end of this parliament. Their broken promises, their abject failure, are not an accident. They are the direct result of an outdated ideology which says all a Government has to do is look after a privileged few at the top and everyone else will follow. That is why this Government has done a great job of squeezing the middle, but a bad job of squeezing the deficit. The test this week for David Cameron and George Osborne is whether they recognise that Britain will only succeed and prosper for the long term by tackling the cost-of-living crisis and building a recovery which works for the many, not just for a few. Or whether they will just offer more of the same old ideas that have failed them, failed everyday working people, and failed Britain over the past four years."

Responding to Ed Miliband's comments, a Conservative spokesman said: "Ed Miliband has no economic plan to secure Britain's future. All he offers is more of the same failed Labour ideas that got us into a mess in the first place - more spending, more borrowing and more taxes. That's why Ed Miliband is simply not up to the job."

Miliband: Tackling the cost-of-living crisis and ending a century of centralisation

Labour leader Ed Miliband will herald the biggest devolution of power to England's great towns and cities in a hundred years as the next stage of One Nation Labour's plan to tackle the 'cost-of-living crisis'. In a speech in Birmingham, he will set out the interim conclusions of Andrew Adonis's Growth Review recommending the end of a century of centralisation by at least doubling the level of devolved funding - handing control of the equivalent of more than £20 billion to City and County Regions over the course of a parliament.

He will say these measures will be included in Labour's election manifesto as another key component of his One Nation plan to halt the race to the bottom - in wages, skills, prospects and productivity - which has left millions of families in the grip of the cost-of-living crisis. Mr Miliband will announce that the process of devolution has already begun with he and Ed Balls writing to the leaders of every council, university and Local Enterprise Partnership asking them to draw up joint plans to boost growth and private sector jobs in their regions.

Those regions that meet strict tests established by the Adonis Review, will be given new powers over transport and housing infrastructure funding, as well as for the Work Programme and skills, he will say. He will underline his message in today's Independent that the central mission of the next Labour government will be to restore the link between the wealth of our nation and family finances. He will counter Tory claims that the structural weaknesses of the economy have been fixed or that the 'cost-of-living crisis' has been solved as he highlights official figures showing how, on current projections, middle-income salaries will continue to lag behind growth for years to come.

Building on policy announcements, made by Labour, on wages and prices over the last six months to tackle the 'cost-of-living crisis;, the main focus of Mr Miliband's speech is on jobs. And he say that, in an era of tough fiscal constraint when Labour will balance the books in the next Parliament, new middle income quality private sector jobs will be crucial to restoring the link between growth and living standards.

In addition to the devolution policy, Mr Miliband will highlight five other key planks in the economic agenda has already set out: greater competition in the banking sector to improve lending to business; revolutionising skills and vocational education; removing some of the predatory short-term pressures afflicting great British companies; supporting small firms by cutting business rates; and protecting British exports by staying in the European Union. Taken together, Labour say, this will help halt the hollowing-out of the middle class and create the conditions in which hundreds of thousands of high skill, high wage, high-tech, high productivity private sector jobs can flourish.

Any end in sight to the cost of living crisis

By Eve Pearce

Despite the recent news that unemployment has fallen to just over 2 million, and that the Bank of England may well, as a result, address inflation, many in the UK are continuing to struggle with poverty and the cost of living. While politicians are unsurprisingly keen to assign blame to each other, or take credit for minor achievements, the cost of living crisis is one that needs to be fundamentally addressed. In order to do so, taking an unbiased look at the causes of this problem is something that must be done by all political parties if we hope to have any real, lasting changes made to rectify the failings of the current systems in place. The problem is of course, a complex one - energy prices, housing, food, and transport all contribute to the issue, and while some changes are happening in the energy industry that could see long term benefits for the country as whole in terms of less emissions and cleaner fuel, whether this will affect prices remains to be seen.

The Origins of the Problem

Tracing the roots of the issue can be tricky at first, especially given the often conflicting statements made by both Labour and the Conservatives. Ed Milliband for example, has made the cost of living a sole focus of attack on the current government, often stating that the problems are as a direct result of the average wage being much lower, up to £1600 a year lower in fact , when compared with 2010. However, what Mr Milliband fails to point out, is that wage stagnation began under the previous Labour government.

Conversely, the Chancellor seemed keen to avoid the most recent figures on the crisis which are indeed a cause for concern, instead referring to more favourable figures from 2012, which suggest the problem is in fact minor at best. Some critics of the recent figures say that it’s too early to consider these recent statistics as a warning sign, and that they may in fact merely be a blip. While this is a perfectly viable argument, the reality for many of the UK’s poorer families seems to suggest otherwise.

The Financial Squeeze

According to the Joseph Rowntree Foundation, a single adult needs to earn just over £16,000 a year, after tax, in order to reach the minimum accepted living standards. The cost of living has been rising faster than inflation, which is the main reason for the financial strains that have been felt by those earning under or near this threshold. The effects have been further compounded by ever rising energy bills, which have been predicted to rise up to 50% in the next six years.

For the general public, especially those on the lower end of the earnings scale or the unemployed, this has also translated into growing problems for a number of sectors. UK car sales for example, have been on the downturn, and a number of people have even traded in car use for biking or walking. Fuel prices haven’t helped the matter, along with additional costs of insurance and general maintenance. That said, there are a number of discounted finances and services on offer for car owners that can ease the burden somewhat, and some providers have been quick to try and adapt to the current climate to attract savings focused consumers. 

Transport and car ownership is only one aspect, of course. Food prices have also risen, leading many to rely on food banks, and consumers focus on making as many savings as possible has been felt strongly in the food retail sector. A number of large UK supermarkets saw profits drift away over the Christmas period - again a likely indicator of consumers tightening the leash on spending as a result of the cost of living crisis. The supermarkets themselves blamed such a downturn on the economic situation, and despite slashing prices were unable to secure satisfactory margins during the period.

Will the Crisis Continue?

Despite the varying political stances, there are some noteworthy omissions from standard party lines that are worth pointing out. The wage stagnation under Labour could in fact have been crucial in keeping unemployment figures down, despite the economic downturn, according to the IFS. Additionally, the Chancellor may have been correct to sideline the 2013 figures, as according to the Bank of England we are likely to come out of the cost of living crisis in the next few years, with wages due to rise.

So far, the Bank’s predictions have been fairly on the money, so with any luck, the next few years will give way to much needed respite for those feeling the bite the most. However, care should be taken not to dismiss the issue entirely, as there are still millions in the UK living on or below the poverty line.