Ed Miliband warns of cost of living 'crisis'

Published on Monday, 28 February 2011 09:05
Posted by Scott Buckler

Ed Miliband is to warn of a "cost of living crisis" hitting low and middle-earners even if the economy improves

 

The Labour leader will argue that "wage stagnation", along with government spending cuts and benefit reforms, will adversely affect living standards. Families with children will be the hardest hit, he will add.The coalition government says its cuts programme is necessary to remove the budget deficit and boost economic growth while aiding general prosperity.The Resolution Foundation think tank, a meeting of which Mr Miliband will address in central London, suggests wages for low and middle earners have failed to keep pace with wider economic growth since the 1970s.

'Failure'

The Labour leader will say: "There is now a very real risk that we will see the longer-term pressure on wages for those on middle and low incomes colliding with rising prices, tax and benefit changes introduced by this Tory-led government and public service cuts which all hit families with children the hardest."My fear for those on middle and low incomes is that more and more families will face a cost of living crisis that will see them left behind, even as the economy eventually recovers."The failure of the government is two-fold: they are not taking steps to build a different kind of economy, and they are hitting lower and middle-income families hardest in the way they are cutting the deficit."Mr Miliband will admit that the governments of Tony Blair and Gordon Brown bear some responsibility for failing to ensure "fairness" in terms of the gap between the richest and poorest in society.

He will say: "Over the last 20 to 30 years that once-safe assumption [that the proceeds of growth would be shared] has broken down.While those at the top have done well, middle and low earners are no longer guaranteed the proceeds of growth.Our economy is increasingly unfair not just for those at the bottom but for many of those in the middle as well."The coalition is worsening the situation by raising VAT and cutting tax credits, he will argue.Mr Miliband will add: "The task for the future is to build a different sort of economy; a high-quality economy with quality jobs and a better quality of life."That means good jobs at good wages for middle and lower income families. And a tax and benefit system that supports families with children, not one which is increasingly skewed against them, as we see under this government."When the prospects for families with children look so bleak, that is why the British Promise in which we once believed the next generation would always do better than the last, is now under threat like never before."

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