Living standards should be a top issue in the big vote on 4 July
‘The Living Standards Election’, that’s how we at Citizens Advice see the big vote on 4 July. Here is why and also our top priorities for the new parliament and next government.
We’re hearing from politicians and experts all the time about the economy, public finances, health and immigration. All of great importance of course. But no more so we think than the living standards endured by millions of families on low incomes about which we’re hearing almost nothing.
And does anyone think real solutions to the ‘big’ election issues are possible with a large part of the population left behind?
Squeezed incomes and high inflation have been the top problems in recent years for most people asking for help with their debts. Last year, using data from local offices and official household information, our national researchers built the National Red Index*. It combines spending on essentials such as food and energy with incomes and fixed costs like rent and council tax.
Negative budgets
The NRI tells us how many households are living with a negative budget where essential costs exceed their income. Four main factors have driven the rise of clients in this unenviable position:
- Income from social security benefits has fallen behind inflation (and even further behind the real cost of living)
- Work doesn’t pay (or pay enough) for many people on low incomes – real growth in earnings has been ‘almost non-existent’** for over a decade.
- Energy costs have seriously impacted households – bills were 100% higher for a period and are still 40% above their pre-crisis levels
- Private rents have been rising above earnings for years – recent interest rate rises have also dragged low-income mortgage holders into debt.
In combination, these factors cause problem debt, poor health, family troubles and real hardship.
How should the next government improve the living standards of families in Epsom & Ewell and throughout the UK? Here are our top priorities:
- Legislate to uprate working-age benefits using official Household Cost Indices in place of the Consumer Price Index (CPI). They will then reflect the true cost of living for low-income households.
- Keep increasing the national minimum wage to lift more people in work out of a negative budget
- Improve energy bills support by expanding eligibility for Warm Home Discount (and support those most in need).
- Ensure affordable access to essential markets through social tariffs for all utility services.
- Reform Local Housing Allowance to better support people paying high private rents.
Sharing hopes for the next parliament
Like many others, we will make available our priorities for the next government to stakeholders, including candidates in the Epsom & Ewell constituency; also our recent work, for example on insecurity and the household support fund, covered in posts online.
We’re optimistic the new government will listen to the case for making improved living standards a high priority. As Citizens Advice, the people’s champion, we have deep roots in communities and constituencies everywhere.
* The National Red Index: how to turn the tide on falling living standards, Citizens Advice, 07/02/24
** A decade and a half of historically poor growth has taken its toll Institute for Fiscal Studies, 06/06/24