Rather predictably, Ed Miliband blamed the cuts for making life tough for those on low and middle incomes this week. And he has heaped scorn on what he calls "rip-off Britain". Both he and Cameron, however, are missing a trick when it comes to making life easier for lower earners. It is in part the green agenda that is driving up living costs and making life harder for vast swathes of Britain.
People on low incomes spend 15 per cent of their total expenditure on food and non-alcoholic drinks, and between a third and a half on housing, fuel and power. Interference under the Labour Government in the form of taxes and subsidies pushed up the costs of these goods. The Coalition government has done nothing in policy terms to reverse this trend, indeed it is continuing with a policy that is pushing up the cost of living in the name of saving the environment: the so-called ”green agenda”.
We have seen the cost of energy rise substantially. A recent report by the Institute of Economic Affairs pointed out: “The government estimates that climate change policies, primarily the Renewables Obligation and the EU Emission Trading Scheme, will be adding 26% to domestic electricity prices in real terms by 2015 and 10% to domestic gas prices.”
Government interference is also pushing up the cost of food. It is difficult to estimate by how much, but the Common Agricultural Policy is pushing up prices through mechanisms that distort the market, while import tariffs deny consumers access to cheap food from outside the EU. Not only that, but onerous environmental regulation prevents the development of new technologies that could bring down the cost of food production. To make matters worse, UK taxpayers are funding this system through payments to the EU. The cost to taxpayers across all of Europe is currently €55 billion a year.
Read the rest of the article on the Daily Telegraph website .