Osborne ducks the living standards challenge

The Chancellor insists that his economic plan is a plan for living standards. But the pre-crash years showed that growth is no guarantee of rising incomes.

After Ed Miliband's pledge to freeze energy prices until 2017 won Labour a notable poll bounce, there is increasing pressure on the Tories from inside and outside of the party to come up with their own emblematic policies to ease the living standards crisis. But in his speech to the Conservative conference today, George Osborne will announce no specific proposals to do so, dismissing what he calls "fiddly gimmicks".

Instead, Osborne will maintain the Tories' focus on welfare reform by pledging to end the "something for nothing" culture. He will announce plans to force 200,000 long-term unemployed benefit claimants to either undertake community work (such as cooking meals for the elderly, cleaning up graffiti and picking up litter), visit a jobcentre every day to look for work, or attend mandatory training and therapy sessions to address underlying problems such as illiteracy, alcoholism and mental illness.

On living standards, he will argue that the best way to help families is to secure the economic recovery and will present Labour as having no plan to do so. "If you don't have a credible economic plan, you simply don't have a living standards plan. For we understand that there can be no recovery for all – if there is no recovery at all." After Miliband quipped in his conference speech, "They used to say a rising tide lifts all boats. Now the rising tide just seems to lift the yachts", Osborne responded that people would be worse off with a "retreating tide".

The Chancellor might be right to argue that a strong macroeconomic strategy is central to raising living standards (although with his continued commitment to austerity, this is precisely what he lacks) but he is wrong to imply that growth alone will be enough to boost incomes. As has been well documented by the Resolution Foundation and others, wages began to stagnate long before the crash, with 11 million people seeing no rise in their earnings since 2003. Growth may now have returned (with output expected to reach around 1% this quarter) but real wages are not forecast to increase until 2015 at the earliest and will not return to their pre-crash levels until 2023. The minimum wage is now worth no more than it was in 2004 and 4.8 million workers are paid less than the living wage.

In response, the government could introduce above-inflation increases in the minimum wage, or spread use of the living wage by making its payment a condition of public sector contracts, or creating living wage zones. But on this, it seems that Osborne will remain silent. For now, he assumes what he has to prove: that the benefits of growth will be fairly shared. Recent history shows that can no longer be taken for granted.

George Osborne takes part in a radio interview at Manchester Central on the first day of the annual Conservative Conference on September 29, 2013 in Manchester. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Commons Confidential: What happened at Tom Watson's birthday party?

Finances, fair and foul – and why Keir Starmer is doing the time warp.

Keir Starmer’s comrades mutter that a London seat is an albatross around the neck of the ambitious shadow Brexit secretary. He has a decent political CV: he was named after Labour’s first MP, Keir Hardie; he has a working-class background; he was the legal champion of the McLibel Two; he had a stint as director of public prosecutions. The knighthood is trickier, which is presumably why he rarely uses the title.

The consensus is that Labour will seek a leader from the north or the Midlands when Islington’s Jeremy Corbyn jumps or is pushed under a bus. Starmer, a highly rated frontbencher, is phlegmatic as he navigates the treacherous Brexit waters. “I keep hoping we wake up and it’s January 2016,” he told a Westminster gathering, “and we can have another run. Don’t we all?” Perhaps not everybody. Labour Remoaners grumble that Corbyn and particularly John McDonnell sound increasingly Brexitastic.

To Tom Watson’s 50th birthday bash at the Rivoli Ballroom in south London, an intact 1950s barrel-vaulted hall generous with the velvet. Ed Balls choreographed the “Gangnam Style” moves, and the Brockley venue hadn’t welcomed so many politicos since Tony Blair’s final Clause IV rally 22 years ago. Corbyn was uninvited, as the boogying deputy leader put the “party” back into the Labour Party. The thirsty guests slurped the free bar, repaying Watson for 30 years of failing to buy a drink.

One of Westminster’s dining rooms was booked for a “Decent Chaps Lunch” by Labour’s Warley warrior, John Spellar. In another room, the Tory peer David Willetts hosted a Christmas reception on behalf of the National Centre for Universities and Business. In mid-January. That’s either very tardy or very, very early.

The Labour Party’s general secretary, Iain McNicol, is a financial maestro, having cleared the £25m debt that the party inherited from the Blair-Brown era. Now I hear that he has squirrelled away a £6m war chest as insurance against Theresa May gambling on an early election. Wisely, the party isn’t relying on Momentum’s fractious footsloggers.

The word in Strangers’ Bar is that the Welsh MP Stephen Kinnock held his own £200-a-head fundraiser in London. Either the financial future of the Aberavon Labour Party is assured, or he fancies a tilt at the top job.

Dry January helped me recall a Labour frontbencher explaining why he never goes into the Commons chamber after a skinful: “I was sitting alongside a colleague clearly refreshed by a liquid lunch. He intervened and made a perfectly sensible point without slurring. Unfortunately, he stood up 20 minutes later and repeated the same point, word for word.”

Kevin Maguire is the associate editor (politics) of the Daily Mirror

Kevin Maguire is Associate Editor (Politics) on the Daily Mirror and author of our Commons Confidential column on the high politics and low life in Westminster. An award-winning journalist, he is in frequent demand on television and radio and co-authored a book on great parliamentary scandals. He was formerly Chief Reporter on the Guardian and Labour Correspondent on the Daily Telegraph.

This article first appeared in the 19 January 2016 issue of the New Statesman, The Trump era