Families face cost of living crisis

Updated: 
Catherine McKinnellSome 70% of voters believe that recent improvements in the economy have not benefited middle and low-income families, according to polling released by Labour today.

Labour said that there was a growing "cost of living crisis", with working people earning an average of £1,350 a year less than when the coalition Government took office in 2010, as prices rise faster than wages.


But the party's Treasury spokeswoman Catherine McKinnell said that the richest in society were not sharing in the squeeze, with bonuses in financial and business services increasing in April this year by 82% compared to the year before to nearly £4 billion.

Labour said that this suggested the figures suggested that bankers delayed their bonuses to take full advantage of the cut in the top rate of tax which came into effect that month.

Polling conducted by YouGov on behalf of the Labour Party found that just 10% of those questioned believe that the 0.6% rise in GDP recorded in the last quarter benefited middle and lower income families, compared to 70% who said they have not.

Some 81% said that prices have grown faster than household incomes over the last year, compared to 3% - and only 1% of women - think that incomes have risen faster.

And 81% said that politicians who claim, as Chancellor George Osborne did in a newspaper article last month, that disposable incomes have grown faster than price rises are "out of touch".

Ms McKinnell said: "Working people know they are worse off under the Tories as prices continue to rise faster than wages. Families have also seen their tax credits and childcare support stripped back while David Cameron has prioritised a tax cut for millionaires.

"We've had three years of economic failure and these figures show families on middle and low incomes are still seeing their living standards falling. And the overwhelming majority of people rightly think that ministers like George Osborne, who claim that families are better off, are totally out of touch.

"While those on middle and low incomes continue to feel the squeeze, the highest earners are doing well. Bonuses soared to almost £4 billion in April as bankers delayed their payouts to take advantage of George Osborne's top rate tax cut. And millions of pounds of tax revenues will have been lost as a result.

"This may feel like a recovery for those at the top, but for everyone else life is getting harder."

Conservative Party chairman Grant Shapps said: "Labour can't be taken seriously on the cost of living when they refuse to acknowledge their role in creating the living standards squeeze in the first place, and have opposed every single difficult decision we've taken to secure an economic recovery that rewards hard-working people.

"And Labour still offer the same old policy that got us into this mess in the first place - more borrowing and more debt. Hard-working people would pay the price with higher mortgage rates and higher bills."

"We know times are tough. That's why we're cutting income tax for 25 million people, taking 2.7 million out of income tax altogether and freezing council tax. And we are fixing the welfare system by capping benefits so no out-of-work household can claim more in benefits than the average family earns in work, and by making sure benefits don't rise faster than wages."

:: YouGov questioned 1,952 British adults for the Labour Party on August 1 and 2.

© 2013 Press Association