Good morning. Keir Starmer is putting the cost of living right at the center of Labor’s campaign for the local elections, which he is launching today, with a claim that, as the party puts it in its press release, “the Tories are leaving families £ 2,620 worse off [this year]- even after the spring statement ”.
It is an alarming figure, and it is worth explaining how Labor has calculated it. The party has taken five factors into account.
Tax burden: Tax as a proportion of the economy is rising from 34.4% in 2021-22 to 35.5% in 2022-23, and the party says this would amount to £ 30bn – which is the equivalent of £ 1,060 per household.
Energy costs: The rise in the price cap from April will push up energy bills by £ 690 per household.
Petrol: The increase in petrol prices over the last 12 months amounts to £ 300 per householdLabor says.
Food: By taking the figure for average household spending on food in 2020, and uprating it in line with the OBR’s forecast for inflation, Labor calculates that food bills will rise by £ 275 per household.
Mortgages: Labor calculates this as going up by £ 295 per householdbased on the impact of interest rate rises on the cost of servicing a £ 100,000, 20-year variable rate mortgage.
In a statement issued overnight, Starmer said:
What did we get in that mini-budget?
A Conservative government that takes far more than it gives to working people. The biggest drop in living standards since the 50s. Taxes the highest in 70 years.
Even allowing for everything the chancellor announced, families are £ 2,620 worse off. Britain deserves better than this.
One obvious problem with the Labor analysis is that three of these five factors amount to inflation (and a fourth, interest rates, is a policy response to inflation), and it is very hard to argue that this is Boris Johnson or Rishi Sunak’s fault. If Labor were to take office this week, inflation would still be soaring. But, as Vote Leave discovered in 2016, even a questionable number can have its uses if it sets the terms of debate. And when voters find that money runs out at the end of the month, they may not be overscrupulous about deciding who to blame.
Labor says, with the revenue from its proposed windfall tax on energy companies, it could cut energy bills for families by up to £ 600.
Here is the agenda for the day.
10am: Lord Grade, the government’s choice for Ofcom chair, is questioned by the Commons culture committee in a pre-appointment scrutiny hearing.
Late morning: Starmer launches Labor’s local election campaign at an event in Bury.
11.30pm: Downing Street holds a lobby briefing.
12pm: Nicola Sturgeon takes first minister’s questions in the Scottish parliament.
1.30pm: Admiral Sir Tony Radakin, chief of the defense staff, and David Williams, permanent secretary at the Ministry of Defense, take part in a Q&A at the Institute for Government.
3.45pm: Sir Patrick Vallance, the government’s chief scientific adviser, speaks at the Royal Society’s Science of Covid event.
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