It’s time to create a new Commission on Living Standards.
Eloise Sacares is a researcher for the Fabian Society.
Improving living standards was central to Rachel Reeves’ first speech as Chancellor. It is no wonder. In 2022/23, disposable incomes (after housing costs and inflation) were barely higher than in the mid-2000s, while the lowest-earning British households has a standard of living that is 20 per cent lower than their counterparts in Slovenia. And the cost-of-living crisis has made falling living standards a concern for most of the population. This is why we at the Fabians are developing a living standards action plan for the new government.
A major challenge is that the issue of ‘living standards’ doesn’t sit neatly in a single department. From reducing transport costs to providing employment support; from maximising workplace pensions to increasing benefits – policies to tackle living standards come under several government departments. This means that ensuring co-ordinated action can be tricky, especially when each department will be balancing its own internal priorities and dealing with tight fiscal constraints.
Our forthcoming research will propose the structures needed to implement an action plan, to significantly raise living standards. One idea, set forward in last year’s Fabian pamphlet ‘Plans for Power’, is to create a new Commission on Living Standards.
There are multiple benefits to having such a commission. An independent body could provide politically neutral, evidence-based advice on controversial issues, such as minimum benefit levels, and could help to depoliticise such topics. A commission could also be designed so that the voices of those living in poverty are considered on an ongoing and equal basis. They could also help to ensure the longevity of any targets beyond political cycles. Finally, such a commission should also be empowered to hold the government to account on any targets or actions related to living standards.
There are many examples of commissions and independent bodies that have been successful. The Climate Change Committee has held the government to account on climate change targets over several parliaments, not least because the Act stipulates that government can be taken to court if it fails to meet these. And the Low Pay Commission paved the way for increases to the national minimum wage, despite this initially having significant political opposition from the right. This then led to the greatest year-on-year increases occurring under a Conservative-led government.
Some argue that a commission would only kick vital action into the long grass. They suggest that evidence gathering isn’t necessary – there is already a wealth of knowledge on what to do to improve living standards. Action is often what’s lacking. The last Labour government did brilliant work on living standards without any formal strategy or structures until the very end of their tenure. But what a commission can offer is the accountability to ensure that governments take action, which may be all the more needed in a difficult fiscal environment. If Labour were to create a Commission on Living Standards, they must ensure that it has both the political will and statutory backing to prevent it from becoming redundant, and that it doesn’t end up delaying vital decision-making.
Commissions can also fail if external factors end up limiting their ability to influence government policy. The Social Mobility Commission has lost credibility over time, as political will on such issues declined and their proposals were increasingly ignored by successive Conservative governments. A 2020 report found ministers have only delivered on 23 per cent of the Social Mobility Commission’s proposals since 2013. But Labour has the chance to learn from commissions that have come before. By reflecting on these experiences, they can make sure to replicate the processes that worked well and learn from previous governments’ mistakes.
The task of improving living standards is urgent – both for people and the broader economy. At the next election, the government will be held to account for decisions they must take now. The recent trends in living standards were not inevitable. Poverty fell the last time Labour was in power, with over half a million children and one million pensioners lifted out of poverty. This government must now step up to the challenge, and increase living standards for all. A Living Standards Commission could give them the necessary push to achieve this.
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