Why Cutting the Cost of Living is Not a Labour Priority

Earlier this week, Sir Ed Davey called for a “GP guarantee.” At a time when British voters say the cost of living is their overriding concern, the Liberal Democrat leader thinks it sensible to put housing developers on the hook for financing NHS services. Quite obviously, this would mean fewer homes get built, and the homes that do get built cost more.

That, in miniature, is Britain’s cost of living politics. Polling and focus groups keep telling Westminster that expensive energy, housing and food are what voters care about most after the inflation shock. Politicians nod gravely and say affordability is their priority too. Then they flinch from the changes that would make essentials cheaper to provide. They want lower prices in theory. In practice, they cling to other goals that keep them high.

Take food. After Brexit, Britain had a chance to junk the EU’s agricultural protectionism and let consumers benefit from lower prices. To be fair, the Conservatives trimmed tariffs on things like biscuits, pizzas, and other processed goods, and signed trade deals with countries like Australia. But when it came to actual farming, the retreat was comically timid. Tariffs barely moved, and even the liberalisation that did happen in FTAs came wrapped in safeguards, quotas and long transition periods. We love cheaper food right up until British farmers might face real competition. Then, suddenly, the issue becomes “food security”.

Energy is similar. This year, the government took an average £150 off household bills by stripping out Energy Company Obligation charges and most Renewables Obligation costs. Which is a neat way of admitting that policy costs do land on bills. Yet if cutting bills were the priority, there are measures beyond shifting obligations to general taxation or even cutting carbon taxes. Local pricing for electricity would reduce grid balancing costs. More domestic gas production would help at the margin. More nuclear power would help too, if we stopped regulating projects as though they were moon landings. But each option runs into a taboo: postcode lotteries, climate backsliding, or panic about safety.

I shan’t rehearse the house price impacts of Britain’s socialist land-use rationing and discretionary planning system. A British government that genuinely prioritised the cost of living would be dishing out far more permissions. But even when development is allowed, policy makes it slower and dearer. Affordable housing mandates reduce profitability. Design requirements add delay and cost. England’s second staircase rule for flats above 18 metres will, by Whitehall’s own estimate, impose roughly £2.7 billion in net costs over a decade. That all means fewer viable developments, fewer homes and higher prices.

We could go on and on here. If Rachel Reeves were really single-minded about easing living costs, why has she announced plans to scrap the de minimis exemption that lets low-value packages enter the UK tariff-free? Because cheap imports collide with another goal: protecting retailers from “unfair” Chinese competition. When affordability runs into another government objective, it usually loses.

This is the central dishonesty. British politicians say they want cheaper essentials. What they actually want is cheaper essentials without upsetting farmers, Nimbys, climate campaigners, incumbent retailers or anyone else with a veto. They want lower bills, lower rents and lower prices, but not if that means fiercer competition, more drilling, cheaper imports, or a rethink of disproportionate safety rules. They want the result, in other words, without the trade-offs. So instead, we end up with gimmicks like administered price controls and vast subsidies that push costs onto other people rather than liberating supply.

Sir Keir Starmer can still say affordability is “at the forefront of my mind”. Rachel Reeves can claim that cutting the cost of living is the government’s “number one priority”. But priorities are what survive contact with other goals. In British politics, lowering the cost of living is everyone’s favourite slogan, and nobody’s revealed preference.