Miliband to warn of “cost of living crisis”

Ed Miliband will warn this morning of a “cost of living crisis” at the launch of the Resolution Foundation’s Commission on Living Standards, arging that “wage stagnation”, along with government spending cuts and benefit reforms, will adversely affect living standards – and that families with children will be the hardest hit.

He 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.”

Adding:

“In the past people have been used to hearing Labour leaders talk about fairness in terms of just inequalities between the richest and poorest. For families in the middle, fairness was important because they cared about a just society but it wasn’t something which made a material difference to their standard of living.

“That was because for many decades, the proceeds of growth and rising prosperity benefited the vast bulk of those working on middle incomes.”

And:

“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.”

Meanwhile, chairman of the Resolution Foundation Clive Cowdery, who will chair the Commission on Living Standards, explained exactly what the problems were, what the commission hoped to achieve and how it would work in an interview on Radio Five Live early this morning.

Listen to it:

Continued:

The five fundamental issues the commission will examine are:

• Who is suffering most acutely from pressures on living standards? Is this a consequence of the downturn or is this group here to stay?

• How are long-term trends in the labour market affecting the lives of people on low-to-middle incomes?

• What is, and what should be, the relationship between those on low-to-middle incomes and the tax-benefit system?

• How are long-term trends in the costs of living changing the nature of life on low-to-middle income?

• How can our public services do more to support families in the pursuit of higher living standards in the years ahead?

Left Foot Forward will have more from the launch of the commission later today.