We are right to make an appeal that understands the hidden hurt of the middle class, says Jim Murphy MP

As delegates leave Labour party conference in Brighton today they do so excited about concrete policy they can take to the doorstep. As the country mulls over Ed’s speech they do so knowing there is a clear choice at the next election between a party which is standing up for middle Britain as well as those on middle incomes and the other whose economic errors are hurting families and businesses across the country.

Yesterday Ed set out clearly how Labour will seek to reverse the break between economic growth and rising living standards which for so long has been taken for granted. Its because of this that there are now so many people fearful that the next generation will be unable to keep pace with, let alone surpass, those which have preceded it. This is a trend which has occurred over time, been accelerated by the Tory-led government which has sucked demand out of the economy and which has been compounded by decisions, such as the millionaires tax cut, which prioritise a privileged few over working and middle class families. In short, the economy is not working for enough working people and it falls to Labour to fix it with our One Nation vision.

Labour leaves our conference with an offer direct to the concerns of middle-class families. Think about the bills that many families most worry about; with mortgages stable it’s the energy bills that often hurt the hardest. With our pledge of extended childcare many middle-income families will celebrate the extra hours of support rather than having to juggle work and the children or trying to get granny to help out every day. Our reforms to the housing market will assure those who worry that their children might not get the chance to own their own home. And the tax cut for small businesses won’t just help businesses grow but help grow the middle class. Labour’s Brighton policies are an appeal directly to the hearts and concerns of middle-class Britain. It’s a way of Labour showing that we continue to understand and have answers to the hidden hardship behind the doors of middle class homes.

Yesterday’s solutions run along clear principles: benefitting the whole country, not a minority few; supporting a competitive market; proactively helping the businesses central to growing our economy. And they are underpinned by the fiscal discipline outlined in Ed Balls’ speech on Monday.

To support small businesses a Labour government would cut business rates in 2015 and freeze them again in 2016, rather than going ahead with the government’s corporation tax cut for the largest firms. To support parents a Labour government would expand free childcare for three- and four-year-olds from 15 to 25 hours per week for working parents, paid for by an £800m rise in the bank levy. To tackle low pay Labour would end the abuse of zero-hours contracts, and to widen opportunity and expertise we would dramatically increase the number of high-quality apprenticeships by making them a requirement of every big company the government buys from.

Compare this with a Conservative record of prices having risen faster than wages in 38 of the 39 months that David Cameron has been in Downing Street and working people almost £1,500 a year worse off under this government. David Cameron is right that we are in a global race, but because he is trying to run it as a race to the bottom it is one where middle-income families and businesses are the losers.

Embodying this are energy bills, which have risen by almost £300 for families since 2010. Bills are going up because when the price of wholesale energy price increases energy companies pass this on but when it drops consumers don’t see their bills fall. According to Which? this flaw in the market has left consumers paying £3.9bn a year over the odds since 2010. Limited competition and weak regulation from Ofgem combine to deliver unfair over-charging and falling trust in the market.

Labour’s solution is not to become ‘anti-market’ or ‘anti-competition’ but to reset the market in this sector to ensure it works for working people and businesses in a growing, dynamic economy.

We will increase transparency by getting energy companies to separate the parts of their businesses that generate energy from the parts that supply to the public and by introducing a simple new tariff structure so people can compare prices. Labour will also require all energy companies to trade their energy in an open market by selling into a pool. These reforms will be overseen by a new watchdog, which will have the remit to force energy companies to cut their prices when there is evidence of overcharging, for example when wholesale costs fall and the market fails to respond.

To put it another way, our reforms are about making competition work.

Vitally, Labour would also take immediate action upon entering office to freeze prices until January 2017 when our reforms would start kicking in. This move is pro-market, since it is a temporary freeze while the market is put on a genuinely competitive footing, and pro-consumer and pro-business, saving the typical household £120 and the average business £1,800.

Labour plans would not just ease all families’ struggle in a stagnant economy but reform the market to both stimulate private sector growth, by helping business, and ensure there is no trade-off between fairness and competition in the energy market.

As Ed said yesterday Labour can win by showing how Britain can be better for all. We now have a strong offer to make that a reality.

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Jim Murphy MP is shadow secretary of state for defence. He tweets @JimMurphyMP

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