Press Story

Fiscal event of the year must put cost of living at heart of government’s agenda, moving beyond the ‘black hole’, argues think tank
IPPR proposes sticking ‘shrinkflation’ labels on products to shame companies, eliminating ground rents, and taking steps to lower energy bills

Tackling the cost of living is the most effective way for the government to restore public confidence in management of the economy, says a new paper from the Institute for Public Policy Research (IPPR).

With all the pre-budget focus on tax measures, the think tank is today setting out its ambitious plans to reduce the cost of energy bills, cut the price of the weekly shop, and take the side of consumers.

The authors recommend a suite of policies, including:

Reducing food prices by forcing smaller convenience supermarkets to stock cheaper non-brand items, and ensuring larger supermarket discounts are available to all customers not just members.
Choosing the side of the consumer by forcing companies to stick ‘shrinkflation’ labels on products, ending in-contract price rises, and reducing all ground rents to near zero.
Cutting energy bills by subsidising electricity costs, lowering the costs of solar, and looking at excess profits of energy network companies.

By making the cost of living its defining mission for the rest of the parliament, and launching a relentless ‘war on bills’, the government can rebuild trust.

Drawing lessons from Australia, Norway and Spain, IPPR argues that centre-left governments around the world are being re-elected only when they have successfully cut the cost of living.

Polling for the think tank shows energy and food costs rank as the top two expenses causing financial stress.

The public think that the government is both to blame for and responsible for “solving” high prices, with over a third blaming government failure for continued high costs, ranking above all other drivers, including Brexit and the Ukrainian-Russian war.

Prices are the key metric on which the government is being judged by voters, the report says. With food prices up by 35 per cent since 2019 and energy costs 50 per cent higher since 2021, IPPR says the interventions do not need to be huge or significantly costly. Instead the paper argues that multiple smaller policies could support consumers and deliver political benefits, so long as they are accompanied by long-term structural solutions and an authentic, consistent narrative.

The authors say that the communication of such policies is as important as the overall package. They recommend using ‘war on bills’ branding, engaging with influencers, and utilising new media.

Sam Alvis, IPPR associate director for the environment and energy security, said:

“The cost of living is still the public’s number one concern. A government that declares a ‘war on bills’ – and means it – can show it’s fighting on the side of working people. Small but visible actions, repeated over time, are the best way to prove that government can make life fairer and more affordable.”

Carsten Jung, IPPR associate director for economic policy, said:

“There are a number of levers the government can pull to lower the cost of living. For example, in many domains consumers are not getting a fair deal – being charged unfair prices and not being given the transparency to make informed choices. The government could lower energy bills and notify them of any reduction, it could cut ground rents paid by so many leaseholders, and it could force more transparency on food prices.”