Each New Year brings the usual flurry of resolutions, many of which are quietly abandoned by the middle of January. And if they just about survived the month, February usually finishes them off. Unlike most forgotten pledges and regimes, Keir Starmer cannot afford to start the year with a U-turn on the commitment he made in his New Year message to an “all‑out war on the cost of living”.
Research conducted by YouGov for Fair By Design shows that 69 per cent of the public support government action to get rid of the extra costs that people on low incomes face for households’ goods and services. This is known as the “poverty premium”. It’s caused by companies charging people on low incomes more because they want to spread out payments and have more control over how much they pay, or they’re considered higher risk and so locked out of the best deals. This can leave people on low incomes paying over £400 extra each year, on top of the increase in bills we’ve all experienced.
For a government trying to hold together a broad electoral coalition, the polling contains a political opportunity as well as a warning. Support for action on the poverty premium is higher among Labour voters from the 2024 election, at 78 per cent, and even higher among Green 2024 voters, at 84 per cent. Whilst it was less popular amongst Conservative and Reform 2024 voters, over half of respondents who voted for these parties in 2024 support government action. The full results are telling. At a time when voter loyalties remain fluid and Labour worries about losing ground on both the left and the right, it is rare to find an economic policy that is popular across the political spectrum.
What is most striking, however, is the absence of the usual demographic divides. The polling shows no meaningful difference in support between higher‑ and lower‑income respondents. Tackling the poverty premium appeals to both those directly affected by these extra costs and those who recognise the inherent unfairness of the system. Action on the poverty premium is also viewed positively across the country and generations. In the context of a febrile political environment this consensus stands out.
The polling also tested public attitudes in the three areas where low‑income households face the steepest penalties: energy, insurance and credit.
Eighty per cent of respondents’ support changing the rules so that energy suppliers can no longer charge people more for paying on receipt of their bill rather than by direct debit. This matters because those who avoid direct debits, to have more control over their outgoings, can pay around £135 more a year.
Seventy‑eight per cent support preventing car insurers from charging higher premiums for paying monthly rather than annually. This matters because people in financially vulnerable situations who cannot pay in one go are more likely to rely on their car for work or caring responsibilities.
Finally, 68 per cent back the idea of loans that have 0 per cent interest for essential household purchases, such as buying school uniforms. When families with low incomes cannot afford to pay upfront, they are often pushed towards high‑cost credit options. Targeted access to interest‑free credit would offer a fairer alternative.
The best thing about tackling the poverty premium – we’re not asking for a huge spending commitment. Instead, it requires political will and regulatory reform to challenge practices that have become normalised despite their disproportionate impact on low‑income households. If a service is essential, then we need to prioritise affordability over profit as charging those with the least the most is counterintuitive.
For a Labour government attempting to project both fiscal responsibility and moral purpose, this is an area where it can act decisively without undermining its commitment to tight public finances.
Labour won in 2024 promising to restore stability, protect living standards and fix broken markets. But as the cost of living continues to dominate public concern it cannot afford to appear passive. The poverty premium represents a clear example of an avoidable injustice embedded in everyday life. It is also a politically unifying issue in a landscape where unifying issues are in short supply.
Starmer was right to make the cost of living central to his New Year message. But the test now is whether Labour can move beyond rhetoric to action. Eliminating the poverty premium would be a visible, targeted and widely supported step towards a fairer economy making it a New Year’s resolution the PM should keep.
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