The Tories' cost of living offensive starts with a whimper

The pledge to cap rail fare increases at 6% is unlikely to impress commuters who have suffered 11 years of above-inflation rises.

At the Conservative conference last week, both David Cameron and George Osborne used their speeches to deride Ed Miliband's focus on the "cost-of-living crisis" on the grounds that it was a distraction from the primary task of 'fixing' the economy. But while doing so, the Tories have also recognised that the Labour leader is onto something. 

The day after Cameron's speech it was briefed that the party would soon launch a "blitz" on the cost of living and that Osborne had "identified water bills, rail fares and bank fees as areas where the government can act to help with household bills." After previously dismissing Miliband's proposed energy price freeze as "a gimmick", Cameron notably acknowledged on ITV's The Agenda that the Labour leader had "struck a chord" with the public. 

With real incomes not expected to rise until 2015 and not expected to return to their pre-crash levels until 2023, Tory MPs are rightly warning their leadership not to dismiss the living standards crisis as a temporary ailment that will pass now growth has returned. A recent ComRes survey found that voters think the Tories are more likely to maintain economic growth (42-33%) and to keep public spending under control (47-28%), but also that they believe their own family would be better off under Labour (41-31%). If one party takes a decisive advantage before 2015, it is likely to be that which wins the trust of the public on both issues.

The Tory fightback has begun today with the announcement that rail fare increases will be capped at 6%, with companies barred from raising individual fares by more than 2% above RPI inflation, rather than the current limit of 5% (provided that the average rise is 1% above inflation). Ministers say that the move could save commuters around £20 a month but with fares still set to rise above inflation for the eleventh year in a row (while average earnings fall for the sixth year in a row), it's rather small beer. Labour has been able to hit back by pointing out that the move doesn't go as far as its pledge to limit all fare increases to 1% above inflation and former transport secretary Andrew Adonis has noted that the cap is "less tight" than the one he imposed in 2009-10. 

The Tories are promising "week by week" announcements in the run-up to the Autumn Statement but they'll need to do better than this to wrest the initiative back from Miliband.

David Cameron leaves Number 10 Downing Street on October 7, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Getty Images.
Show Hide image

Free movement isn't free: the truth about EU immigration

The UK does not need to leave the single market to restrict European migration - it already can.

In the Brext negotiations, the government has unashamedly prioritised immigration control over the economy. The UK must leave the single market, ministers say, in order to restrict free movement. For decades, they lament, European immigration has been "uncontrolled", making it impossible to meet the government's target of reducing net migration to "tens of thousands" a year.

It's worth noting that non-EU immigration alone (which ministers can limit) remains more than ten times this level (owing to the economic benefits). But more importantly, liberals and conservatives alike talk of "free movement" as if it is entirely free - it isn't.

Though EU citizens are initially permitted to live in any member state, after three months they must prove that they are working (employed or self-employed), a registered student or have "sufficient resources" (savings or a pension) to support themselves and not be "a burden on the benefits system". Far from being unconditional, then, the right to free movement is highly qualified.

The irony is that the supposedly immigration-averse UK has never enforced these conditions. Even under Theresa May, the Home Office judged that the cost of recording entry and exit dates was too high. Since most EU migrants are employed (and contribute significantly more in taxes than they do in benefits), there was no economic incentive to do so.

For some Brexiteers, of course, a job is not adequate grounds for an immigrant to remain. But even beyond implementing existing law, there is potential for further reform of free movement - even within the single market.

As Nick Clegg recently noted, shortly after the referendum, "a number of senior EU figures" were exploring a possible trade-off: "a commitment by the UK to pursue the least economically disruptive Brexit by maintaining participation in the single market and customs union, in return for a commitment to the reform of freedom of movement, including an 'emergency brake' on unusually high levels of intra-EU immigration." Liechtenstein, a member of the single market, has recently imposed quotas on EU migrants.

Yet with some exceptions, these facts are rarely heard in British political debate. Many Labour MPs, like their Conservative counterparts, support single market withdrawal to end free movement. The unheard truth that it isn't "free" could yet lead the UK to commit an avoidable act of economic self-harm.

George Eaton is political editor of the New Statesman.

0800 7318496