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UK PM Starmer Shifts Focus to Raising Household Incomes, Waters Down Economic Growth Pledge

by DD Staff

December 05, 2024

A woman buys groceries with her children from a store in Clitheroe, East Lancashire, Britain

key takeaways

LONDON (Reuters):British Prime Minister Keir Starmer announced Thursday that he will use GDP per capita and household disposable income data over the course of the five-year parliament to assess how well his government is doing at stimulating the economy.

According to a paper outlining Starmer's goals, the government will "aim" for the fastest economic growth per capita in the Group of Seven advanced nations, which is a dilution of what was formerly a "pledge."

By the end of the session, it pledged to raise living standards in all parts of the United Kingdom.

"We will measure headline progress against this milestone through higher Real Household Disposable Income (RHDI) per person and Gross Domestic Product (GDP) per capita by the end of the parliament,"

Household disposable income, adjusted for inflation, rose on average by just 0.3% per year between 2019 and 2024, marking the worst parliamentary term for living standards since records began in the 1950s, according to the Institute for Fiscal Studies, a think tank.

The Office for Budget Responsibility, whose forecasts underpin government's budgets, predicts only a small improvement during the current parliamentary term, which looks on track to be the second-worst in terms for growth in disposable income.

Britain's government had previously pledged to deliver the fastest growth in per-capita GDP in the G7 for two years running by the end of the parliament - something that has never happened according to OECD records that date back to the 1970s.

Starmer's plans to deliver on election pledges said living standards would improve across the country and working people would have "more money in their pocket", the document said.

Labour won a sweeping majority in July, taking power for the first time in 14 years, but has fallen behind the opposition Conservative Party in some recent opinion polls.

(Reporting by Alistair Smout, Muvija M and Andy Bruce; Writing by Catarina Demony; Editing by Kate Holton and William Schomberg)