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Labour Calls For New Measure On Living Standards

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Ed Miliband has called for a new measure on living standards, so the next government can be judged by its success in improving income distribution.

In a letter to Sir Andrew Dilnot, Chair of the UK Statistics Authority, the Labour leader says existing measures fail to paint an accurate picture of the experiences of families across the country.

Mr Miliband also argues that current living standards measures are “out of date”, with the most recent family resources survey showing data from 2012/13.

He also argues that current measures “miss out the earnings of the self-employed, who make up an increasing proportion of the labour force”.

With existing measures of income “significantly lagged”, policy makers “fail to understand and respond to changes in living standards”, says Miliband.

The Labour leader has called for a new indicator of living standards to include the earnings of the self-employed, the impact of wages, prices, tax and benefits on a persons income.

Miliband writes, “a new indicator should show the experience of people across the range of the income distribution, and pick up how changes in wages or prices vary for those at the top, middle and bottom”.

Miliband suggests that this new indicator should be published “at least quarterly” and be “based on data not older than six months”.

Adding: “A future Labour government would use this indicator as the key measure by which we would expect our success to be measured, and I would ask the OBR to forecast this alongside measures of GDP.

“We would be grateful if you could consider this issue, and the prospects for a new indicator, swiftly so that future governments can be fully held to account.”

Commenting on Labour’s call for a new measure on living standards, Ed Miliband said:

“The current government’s failure on living standards means working people have seen their wages fall by more than £1,600 a year since 2010 while full-time workers have seen their pay fall by over £2,000 a year.

“Indeed, this is set to be the first time since the 1920s that people are worse off at the end of the Parliament than they were at the beginning.

“This does not only cause hardship and pain for millions of families, it has also directly contributed to the Government’s failure to clear the deficit with stagnant wages leading directly to reduced tax revenues and higher welfare bills.

“Income tax receipts have fallen short of their 2010 expectations by more than £68 billion and revenue from National Insurance Contributions by £27.3 billion.

“But the experience of everyday families too often does not make its way into the minds of policy makers because current measures are flawed:  the wage index ignores the growing number of self-employed; income data is a year out of date; and there is disagreement on which – out of a myriad of different indicators on prices – to use.

“And too often people look at the growth figures or hear the boasts from George Osborne and know these don’t reflect what is happening in their life.

“People are working harder and harder but getting nowhere; the feeling of dread that comes when bills come through the letterbox; the worry that money will not stretch to the end of the month.

“We measure so many aspects of  our economy but the one thing we don’t properly measure is the thing that matters most: the success of working people.

“It’s time we had a measure of the success of our economy which reflects the success of working people.

“That is I how judge the success of our country and how I will judge the success of my government.”

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