The Cost Of Labour: British families £1,700 worse off in just one year of Keir Starmer and Rachel Reeves

Just one year into Labour's time in office, the Conservatives have exposed the staggering cost of Keir Starmer's government on working families across the country.

Because of the choices Labour has made in office, hardworking families face paying an extra £1,761 a year.

With inevitable tax rises looming in the autumn to make up for the black holes created by Labour's u-turns and Starmer's inability to control his Party, this could rise by a further £1,027 by the end of the year.

Mel Stride MP, Shadow Chancellor of the Exchequer, said:

“In just 12 months, Labour has taken a wrecking ball to the economy – and it's working families who are left to pick up the bill.

“This is the worst start to a Government in living memory but the pain isn't over. Autumn's tax hikes are now all but inevitable. This is chaos created in Downing Street.

“Only the Conservative Party, under new leadership, stands for sound public finances and fairness for taxpayers”

ENDS 

COST OF LABOUR

Central

Other

Methodology we have considered the additional costs facing the British people for the financial year 2025-26 above last year this considers both the increase in bills as well as certain tax changes which have a measurable impact upon working people. For the purpose of this study, we have used the number of working households as a proxy for those impacted by labour changes of 18.6 million. Our figures use official sources or respected sources.

Bills

• Energy bills have risen by £152 since July 2024. Energy bills for typical households will be £1,720 from 1 July (Q3 2025), £152 more expensive than a year ago when Labour came in they were £1568 (Q3 2024) (Ofgem, Energy Price Cap, link).  

• Council Tax will rise by £109. 85 per cent of 139 top-tier authorities have promised or confirmed council tax rises of 4.99 per cent, with six councils planning to raise council tax above 4.99 per cent. For the average Band D property Council Tax will increase by £109 (Sky News, 19 February 2025, link).  

• Water bills will rise by an average of £123 a year. Water bills are set to rise by £10 a month (£123 a year), with people residents in certain areas seeing an increase of up to 47 per cent (BBC News, 30 January 2025, link).  

• Car tax is up £5 a year for the standard rate. From April, the standard rate of Vehicle Excise Duty will rise by £5 to £195 a year, with electric vehicles no longer exempt (BBC News, 25 February 2025, link). 

• TV license bills are up by £5. The annual cost of a standard colour TV licence will increase by £5 to £174.50 from April (BBC, Press Release, 29 November 2024, link). 

• Phone bills are up £46. The average phone bill is £903, with phone providers increasing their bills by between 4 and 5 per cent above inflation, meaning the average increase will go up by £50 to £953 (Uswitch, Guides, 14 March 2025, link; Uswitch, Studies, 7 February 2024, link). 

• Broadband is up £36. From 1 April, the cost of broadband for households on a fixed price plan is increasing by £36 to £358.80 (Uswitch, Broadband, 14 March 2025, link). 

• Nursery fees are up by £756. Nursery fees are increasing because of the National Insurance Jobs Tax by an average of 10 per cent, meaning that for a child under the age of two in part-time nursery for 25 hours a week the cost will increase by £756 to £7,569 (NurseryWorld, 11 February 2025, link). 

• Groceries and takeaways have increased by an average of £210 a year. The price of food and non-alcoholic drinks increased by 4.2 per cent between July 2024 and May 2025. In 2024, the average family spent £5,023 on food, including £3,745 on groceries and £1,278 on food at restaurants and takeaways. A 4.2 per cent increase means that the families will spend £5,233 on food and non-alcoholic drinks, a £210 increase (Office for National Statistics, Inflation and price indices, 18 June 2025, link; NimbleFins, Average UK Household Cost of Food, 9 January 2025, link).

Other

• Labour's Jobs Tax could cost families £308 a year. The OBR's March EFO 2025 sets out that the impact of the Jobs Tax in 2025-26 would be passed through ‘via lower nominal wage increases and higher prices' at a rate of 60 per cent. To be conservative our model applies a 30 per cent pass through in the first year (assuming 30 per cent is passed to lower nominal wage increase and 30 per cent to higher prices). For future years (2026-27 onwards) we apply the OBR's rate that ‘76 per cent of the total cost [of the Jobs Tax] is passed through to employees via lower real wages'. We then divide the total proportion of the NICs bill passed through to wages by the number of working households which is 18.6 million. This means Jobs Tax will cost £308 in 2025-26, then an average of £807 for following years (OBR, Economic and Fiscal Outlook, March 2025, link).

• Rising debt interest per household will cost £677 per household. Over the forecast period the OBR sets out Labour's decisions increased debt interest payments by an additional £76.1 billion – with the total debt interest increasing every year of the forecast. In 2025-26 the total increase will be £12.6 billion, per working household that will be £677 (OBR, Economic and Fiscal Outlook, Table 5.2, March 2025; OBR, Economic and Fiscal Outlook, Table 6.1, October 2024).

• Labour's 100-year Chagos Surrender Tax will cost £11 per household. The bill for the first year of the Chagos Surrender will be £205 million, per working household works out to £11 tax (Internal Analysis based on official government figures, 30 June 2025, available upon request).