‘Cut bills, build trust: the new formula for progressive politics’

The Government is not having the easiest time – tight fiscal space, an insecure and uncertain country, and a public realm in tatters. Finding light at the end of the tunnel let alone a way through it seems nigh on impossible.

But a playbook is emerging. Mamdani’s election in New York a few weeks ago is the latest proof point that a relentless focus on living standards is the uniting theme for progressives. Whether affordability, the cost of living or a war on bills, progressives in Australia, Spain, Norway, Canada and now New York, have all used lowering costs to rebuild trust in delivery. Rather than reinvent the wheel, Labour should use the budget as its debut for the same strategy.

Cost of living dominates the public’s priorities – two thirds say it is the most important issue for the country – above the NHS or immigration. It has sat comfortably on top since early 2022. The concern is most acute for those on lower incomes, but it remains the top priority regardless of income. 

READ MORE: ‘To win back trust, Labour needs a clear dividing line on tax’

The problem the government faces is that the long term answer to this question is wages increasing. But these take time to turn around, and whilst confidence is low and insecurity is high, people are less likely to make the investments or job moves that growth and innovation require. As Biden found out, championing broader economic success like growth and investment, when cost of living is paramount, at best falls flat and, at worst, sounds like championing the interests of others (read businesses) over individuals.  

The public is not looking for government to solve the cost of living. They recognise that it is an intractable issue, with many of the causes out of government’s control. But they don’t see that as an excuse to not try. This has been key in Australia for example, where multiple small interventions – a tax cut here, help with solar, a campaign on food prices there – allowed the government to continually hammer home the same message – we care about what you care about and we’re trying. It was a relentless focus on one agenda. 

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The budget can’t bring forward a one and done reduction in energy bills. The communication of the policy is as important as the policy outcome. Take a cut in VAT off energy –  easy and quick yes, but politically unhelpful. The public don’t know that VAT is on their bills, if it comes off they aren’t going to notice. Rather than forgo that £2.5 billion in revenue better to spend it. Subsiding to the same amount whilst writing to every household from the PM championing the bill reduction is going to be far more noticeable – something Octopus are experimenting with through their own energy bill comms. 

A drip feed of policies over the course of the parliament reinforces a consistent message. But timing is also important. Government is not blessed with fiscal space – it can’t turn the taps on to subsidise costs (and shouldn’t!). But if fiscal headroom does increase towards the end of the parliament, and the government may be able to help more people, it’ll do so having built credibility that it is doing so genuinely in their interests. The risk is if they wait to talk about living standards in three years time it sounds inauthentic or all people remember is the bad things like winter fuel payments. 

Strong communication sharpens who the government is for but equally who it is not. 

Some policies won’t directly reduce bills, but will make consumer life easier. Mandatory labelling of shrinkflation has been successful in France and Australia. Spain has done well clamping down on excess profits in its energy system (something to look at in UK network providers). Energy bills should be the priority, starting by looking at levies that don’t serve a clear enough purpose – the climate change levy for example. Tackling ground rents, removing exit fees, making supermarkets stock non-brand products and open discounts to non-members or stopping contract price rises – these can all be part of the same argument. Keir Starmer may not be Pedro Sanchez, but if Anthony Albanese can prosecute this argument so can he.

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No one is pretending the budget will be easy, or that a focus on cost of living will eradicate any concern over tax rises. But it will begin to show that, government is doing everything it’s doing in the public interest, that it isn’t just waiting until there is growth, or 1.5 million homes, or clean power in five years time but that it is working for people now. 

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