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Tuesday, August 13, 2013

Falling living standards are a problem of Labour’s making

Over at Liberal Democrat Voice Nick Thornsby makes some very important points about Labour's latest claims on falling living standards.

Labour’s shadow financial secretary to the Treasury has pointed out that by 2015, official forecasts show working people will have lost an average of £6,660. The reality though is slightly different:

Of course, this is a serious issue. Times have been incredibly tough for a very large number of people over the past few years. But falling living standards are a symptom of economic problems, which of course preceded the coalition. The fall in living standards since 2008 serves primarily to highlight just how disastrous Labour’s economic record is, not only having failed to “abolish boom and bust” but doing the very reverse by engineering one of the biggest booms and consequently biggest busts in the developed world.

And how much worse would things would have been had it not been for the stabilising effect of the coalition’s balanced programme of deficit reduction combined with monetary activism, both of which have kept interest rates at record lows? It’s easy to forget that even small increases in interest rates bump up mortgage payments significantly.

And thanks to the Lib Dems, those on the lowest incomes are keeping significantly more of the money they earn. Combined with other measures such as freezes to council tax and fuel duty, the coalition has actually done a lot to help those trying to make ends meet.

Whoever was in power now would have been faced with falling living standards — recall former Governor of the Bank of England Sir Mervyn King’s warning before the 2010 election — but the problem is one largely of Labour’s making thanks to their reckless economic policy. The coalition might not (yet) have been able to reverse the trend, but they have done a number of things to help. However, only a sustained and sustainable economic recovery will deliver a turnaround in living standards – so today’s further good news on that front has to be welcomed.

This is going to be the big debate in the run-up to the 2015 General Election. It is as well therefore that we get our facts right.
Labour needs a significant amount of pop to be low income to insure it's vote, if everyone came affluent over night in Wales, Labour would be out on their bums
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