Miliband under pressure over cost of living

Ed Miliband
Ed Miliband
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ED MILIBAND is facing questions over his cost of living election strategy in the wake of new figures showing average wages are rising higher than headline inflation for the first time in four years.

Unemployment in Yorkshire has also fallen by 15,000 in the last year although the latest data shows it rose by 3,000 in the last quarter.

The “cost of living crisis” has become the centrepiece of Labour’s message, particularly since Mr Miliband’s promise last year to freeze energy bills if the party wins back office in 2015.

But five weeks ahead of local and European elections which will act as a key indicator of how Labour is performing a year out from the General Election, that approach is facing its biggest challenge yet.

Figures showing CPI inflation has fallen to 1.6 per cent have now been followed by data that suggests average wages are growing by 1.7 per cent.

Chief Secretary to the Treasury Danny Alexander said: “These figures are some of the strongest evidence yet that we are embedding the recovery. We have record numbers in work and unemployment falling at the fastest rate in over a decade.

“With earnings now rising in line with prices and employment rising, these figures reinforce the fact that the only way to higher living standards is to take the difficult decisions needed to deliver our long-term economic plan.

“There is still a great deal more to do, but today’s announcement is solid progress on building the stronger economy in a fairer society that Liberal Democrats entered coalition to deliver.”

There are already signs of Labour shifting its focus away from the broad cost of living to which parts of society are benefitting from the economic recovery.

In his much criticised response to last month’s Budget, the Labour leader claimed the recovery is “not working for working people” and said the one group better off under the Government were the “Chancellor’s chums”.

Speaking after the latest data, Shadow Work and Pensions Secretary Rachel Reeves, the MP for Leeds West, said: “While this fall in overall unemployment is welcome, today’s figures show nearly 900,000 young people are unemployed and long-term youth unemployment has soared under David Cameron. The Government should introduce Labour’s compulsory jobs guarantee to get young people into work.

“At long last, earnings are finally rising faster than CPI inflation when bonuses are included, but after four years when prices have risen faster than wages, there is a huge amount of lost ground to catch up.

“Working people are now over £1,600 a year worse off than when David Cameron came to office, most people are not feeling any recovery, and the link between the wealth of the nation and family finances remains broken.”

The Office for National Statistics said it was the first time since the spring of 2010 that CPI inflation has not exceeded the increase in pay, although the figure for public sector workers was 0.9 per cent, compared with two per cent in private firms.

Across the country, the number of people claiming out of work benefits fell by 30,400 in March to 1.14 million, the 17th consecutive monthly reduction, and self-employment increased by 146,000 to 4.5 million, the highest since records began in 1992.