New Labour (Blair) the Fianna Fail of England

Ed Miliband warns of crisis for middle earners
A cost of living crisis is hitting middle earners and traditional families and is set to get worse, Ed Miliband will warn.

Labour Party leader Ed Miliband Photo: PA
Melissa Kite, Deputy Political Editor 9:00PM GMT 26 Feb 2011

Families where the woman stays at home to look after children are being most adversely affected by the Government’s economic policies, the Labour leader will claim.
In a speech at the launch of a Commission on Living Standards on Monday, Mr Miliband will point to research showing that since the 1970s, wages for middle and low earners have grown more slowly than the economy as a whole.
His remarks will be taken as a partial admission that the last Labour government did not do enough to bolster the spending power of sections of middle England.
Data from the Resolution Foundation, which is behind the new commission, shows that inflation over the past decade has impacted harder on families on low to middling incomes, making those families £150 a year worse off since 2000.
Mr Miliband will warn that there is now a high risk of a sustained period of wage stagnation affecting middle and low earners, which, taken together with tax and benefit changes planned by the Government, public service cuts and rising prices, will hit families hard.
“There is now a very real risk that we will see the longer-term pressure on wages for those on middle and low incomes colliding with rising prices, tax and benefit changes introduced by this Tory-led Government, and public service cuts which all hit families with children the hardest,” he will say.
“My fear for those on middle and low incomes is that more and more families will face a cost of living crisis that will see them left behind, even as the economy eventually recovers.”
Labour also points to research from the Institute for Fiscal Studies showing that in 2011 single-earner couples with children will lose on average £1,500 through higher taxation and cuts to tax credits and benefits.
This is twice is as much as a single-earner couple without children would lose, even before next year’s changes in child benefit hit households containing a higher-rate taxpayer.
Among dual-earner couples, those with children will lose on average almost £1,400 a year – almost £500 more than their counterparts without children.
Mr Miliband is said to be keen to position himself on the side of the squeezed middle classes.
“In the past people have been used to hearing Labour leaders talk about fairness in terms of just inequalities between the richest and poorest,” he will say.
“For many decades, the proceeds of growth and rising prosperity benefited the vast bulk of those working on middle incomes.
“Over the last 20 to 30 years, that once-safe assumption has broken down. While those at the top have done well, middle and low earners are no longer guaranteed the proceeds of growth. Our economy is increasingly unfair not just for those at the bottom but for many of those in the middle as well.”
This weekend Ed Balls, the shadow chancellor, repeated his warning that Labour could bring in an annual “mansion tax” and lower the earning threshold for the 50p top rate of income tax from £150,000 to £100,000.
Asked about the rate in an interview with Progress magazine, he said: “Those are discussions that we still have to have … I think [my support for a £100,000 rate] depends. It depends very much on where we are in the future. The principle is that the tax system should be progressive.”