Britain On Purpose

Campaign 3

Make Everyday Life Affordable

Track whether wages, taxes and essential costs are actually leaving households better or worse off.

Economic statistics can say inflation is falling while households still feel under pressure.

That is not necessarily a contradiction.

Lower inflation means prices are rising more slowly. It does not mean the prices people already pay have returned to where they were.

Britain on Purpose wants government policy judged against the question households actually care about:

Are people becoming better able to afford everyday life?

The campaign in 30 seconds

The problem

Headline inflation alone does not tell us whether living standards are improving.

Government policy

Government has introduced measures intended to reduce household pressures, including removing VAT from domestic electricity from October 2026. It estimates this will save an average household around £45 a year. (GOV.UK: Breathing space on your energy bill)

Our proposal

Create a public Household Living Standards Scorecard combining income with the essential costs people actually face.

Success looks like

Household purchasing power improving sustainably, across different types of household.

What the evidence says

The latest retrievable ONS inflation bulletin showed CPI inflation at 2.9% in July 2026, with CPIH at 3.1%. (Office for National Statistics)

The ONS Household Costs Index shows why one headline number is not enough. Overall household costs rose 2.8% in the year to June 2026, while private renters experienced inflation of 3.0%. (Office for National Statistics)

Average UK private rent reached £1,393 per month in July 2026, 3.7% higher than a year earlier. (Office for National Statistics)

From October, Ofgem's typical annual price-cap figure rises 4% to £1,723 for a dual-fuel household paying by direct debit, although actual bills depend on usage and tariff. (Office for National Statistics)

Lower inflation is good. But it is not the whole story.

Income after tax versus the cost of essentials.

The Household Living Standards Scorecard

Track:

Real wages

Are earnings increasing faster than household costs?

Disposable income

After tax and inflation, are households actually better off?

Food

What is happening to the price of essentials?

Energy

What are households actually paying?

Housing

What is happening to rents, mortgages and other housing costs?

Transport

Childcare

Tax and benefits

Different households

How do the results differ for renters, homeowners, families, pensioners and different income groups?

Measure government interventions too

Whenever government announces a major cost-of-living measure, citizens should be told:

  1. 1

    What is changing?

  2. 2

    Who benefits?

  3. 3

    How much are they expected to save?

  4. 4

    What does it cost taxpayers?

  5. 5

    Is it temporary or permanent?

  6. 6

    What actually happened afterwards?

An announcement is the beginning of accountability, not the end of it.

Avoid the average-household trap

People experience the economy differently.

A private renter can face very different pressures from an outright homeowner.

A family paying for childcare has different costs from a retired household.

That is why Britain on Purpose supports showing distributional measures alongside national averages.

What we are asking government to do

Publish a Household Living Standards Scorecard alongside major Budgets and fiscal events:

Income → Tax → Essential Costs → Real Purchasing Power → Government Intervention → Latest Result

What we are not proposing

Government cannot control every price.

Global energy markets, interest rates, commodity prices and international events all matter.

Nor should every increase in living costs automatically trigger a subsidy.

The question is whether policy is creating the conditions for sustainable improvements in living standards, rather than simply moving costs somewhere else.

What would change our mind?

We should acknowledge improvement when sustained evidence shows real incomes rising, essential costs becoming more manageable and household financial resilience improving.

Likewise, interventions that cost significantly more than the benefits they produce should be reconsidered.

Policy in Practice

Cost-of-living policy is particularly vulnerable to unintended effects because interventions often move costs rather than eliminate them.

Track government decisions affecting:

Income taxBenefitsEnergyRentsTransportChildcareFoodHousing

For each intervention ask:

  • What did households save?
  • What did taxpayers pay?
  • Who benefited most?
  • Did prices or behaviour change elsewhere?

A subsidy may lower the immediate household bill while increasing public spending. A tax reduction may raise disposable income but produce different benefits at different income levels.

What the parties are proposing

We apply the same test to every party: is the proposal costed, independently verified, and does it define how success will be measured?

Current Government

The Government is using a mixture of higher minimum wages, energy-bill reductions, cheaper transport and childcare support. The National Living Wage increased to £12.71 an hour in April 2026 (up 4.1%). From 1 October 2026, VAT on domestic electricity falls from 5% to zero for six months — the Government describes this as an annualised average saving of around £45; the IFS estimates the actual six-month saving at around £25. From January 2027, single bus fares outside London will be capped at £2, backed by £400 million of government funding. Eligible working parents in England can receive 30 hours of funded childcare a week for children from nine months to school age, with government-cited research estimating average savings of around £8,000 a year for working families.

Expected benefit

Higher minimum wages directly increase take-home pay for lower-paid workers. The electricity VAT cut and bus cap reduce two significant household costs. Childcare support can substantially reduce outgoings for working families.

Potential trade-off

Higher pay increases employer costs. The electricity VAT cut costs the Treasury an estimated £850 million in 2026/27. The bus cap is funded partly by reprioritising existing budgets. Childcare benefit depends on sufficient places being available.

Government energy bill policy →

Conservatives

The Conservatives' Cheap Power Plan proposes removing VAT from household energy for three years and wider changes to energy taxes and policy. The party says its immediate package would save an average household around £200 a year on electricity.

Expected benefit

Households would pay less for electricity immediately, with the party estimating savings of around £200 a year for an average household.

Potential trade-off

Abolishing taxes and levies removes government revenue or funding streams. The wider plan would also change Britain's current approach to carbon pricing and energy investment.

Conservative Cheap Power Plan →

Liberal Democrats

The Essential Energy Guarantee would discount an amount equivalent to half typical household energy use. The party estimates average savings of around £100, rising to £140 for the lowest-income households. The £3 billion annual scheme would initially be funded through £2.5 billion recovered from energy-network windfall profits and £500 million from a proposed bank windfall tax.

Expected benefit

Support is more targeted towards households in greatest need than a universal tax cut, with higher savings for lower-income households. The first two years have identified funding sources.

Potential trade-off

A longer-lasting scheme would require a sustainable funding source beyond the initial two-year period. The windfall profit recovery mechanism would need to be maintained.

Liberal Democrat Essential Energy Guarantee →

Reform UK

Reform proposes raising the income-tax personal allowance to £15,000, which it says would save most taxpayers £486 a year, alongside an energy package it says would cut household bills by another £250 a year by removing policy costs and VAT from household energy. The IFS estimates that each £100 increase in the personal allowance costs roughly £800 million a year in reduced tax receipts, although Reform says its wider savings would fund its commitments.

Expected benefit

The combined measures could significantly increase disposable income for qualifying taxpayers, with the party estimating savings of over £700 a year from both measures together.

Potential trade-off

Removing policy costs from energy bills shifts some costs to the Treasury, while raising the personal allowance reduces tax receipts. Britain on Purpose would want the combined package independently costed.

Reform UK policies →

Green Party

The Greens propose a £15 minimum wage for all adult workers by April 2027. They also propose moving remaining energy-policy costs and energy-debt servicing from electricity bills into general taxation, which they estimate could reduce typical bills by at least £150. The party estimates this would cost roughly £4.2 billion and proposes funding it through more progressive taxation, including National Insurance on investment income.

Expected benefit

Lower-paid workers could receive substantially higher wages. Households could see lower electricity bills of at least £150. The cost is funded through progressive taxation rather than flat charges.

Potential trade-off

A £15 minimum wage would increase employer costs, so effects on prices, hours and recruitment would need monitoring. Moving energy costs into taxation changes who pays for them, not whether they are paid.

Green Party Workers' Charter →

Where there is common ground

All five approaches agree that household energy costs are too high and that government can act to reduce them. There is also broad agreement that incomes matter alongside prices. The key disagreement is who should pay for support: consumers, taxpayers, businesses, energy companies, higher earners or some combination of them.

Britain on Purpose: The Test

There is no such thing as a cost-of-living policy without consequences somewhere. A policy should not be judged by the size of the saving announced. We want one household scorecard: Income → Tax → Housing → Energy → Food → Transport → Childcare → Real Purchasing Power. For every intervention: What did households save? What did taxpayers pay? Who benefited most? Were there unintended consequences? Were people actually better off? Measure what households experience, not just what governments announce.

Evidence and sources

Measure what households experience, not just what governments announce.