A new study from the Joseph Rowntree Foundation (JRF) warns that Labour could oversee the worst parliament on record for living standards, with average household incomes projected to fall by up to £770 in real terms by 2029-30. The thinktank described Britain's outlook as “dire” unless the government takes “bold policy action”.
Income projections and historical context
According to the JRF, after housing costs, average household incomes will be between £440 and £770 lower in real terms in 2029-30 than when Labour came to power two years ago. Even the lower end of that range would mark the biggest decline in living standards since modern records began in 1961, the thinktank said.
Chris Belfield, chief economist at the JRF, said: “Without bold policy action on living standards, families are set to be poorer than they were a decade ago. This is terrible both for families who are just treading water to get by and the more than 7 million families who are already routinely going without essentials like food and basic toiletries.”
Energy support plans and expert reactions
The warning comes as Andy Burnham's Chancellor John Healey is reported to be working on plans to spend more than £1bn to help energy consumers, with the bulk likely to go towards increasing the discount given to households on certain benefits.
Alex Chapman, head of economic and environmental policy at the New Economics Foundation (NEF), said: “A serious price spike is coming, and without action, bills will exceed the peak of the last crisis. The government must use the budget to put in place both targeted support for the most vulnerable and, critically, a safety net for all.”
He added: “Repeated crises have exposed the flaws in our privatised energy system – these can only be fixed by fundamental reform. This means capturing the benefits of cheap renewables and offering every household a ‘block’ of essential energy at a truly protected and affordable price.”
Call for a better energy toolkit
Alfie Stirling, economist and director of policy at the JRF, said: “Energy support for this winter needs to tick three boxes. It needs to support the majority of households; within this, it needs to target the most support towards those in greatest need; and – as far as possible – it needs to actually lower the price, thereby bringing down inflation.”
Stirling continued: “The UK does not yet have the right toolkit to respond effectively to energy price shocks – building better tools is now a critical priority for our future security and living standards.”
A spokesperson for the Treasury said: “As has always been the case, decisions on tax are a matter for the chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals.”
