A warning for people who think the cost of living squeeze will hurt the Tories

Keir Starmer and Rachel Reeves have made progress with the story of a high-tax government squeezing living standards because it is also a low-growth government, writes John Rentoul

Boris Johnson congratulates Rishi Sunak on delivering the spring statement last month (PA Wire)

The last time there was a drop in people’s real disposable income was 2016-17. There is a lesson there for politicians: don’t have an election then. There were other reasons Theresa May lost her majority in 2017, but the fall in living standards didn’t help.

There are other lessons. There was a fall in real disposable income in 1980-81. Margaret Thatcher was so unpopular that it was widely assumed she would U-turn on her cruel economic policy, and she wouldn’t last long anyway. The Labour Party took advantage of its obvious winning position to engage in an epic civil war that resulted in the breakaway SDP, which was (less widely) assumed to replace it as the main non-Tory alternative.

It wasn’t the Falklands war that saved Thatcher – although it helped; it was the return to growth. Household incomes rose slightly in 1981-82 and more sharply in 1982-83, just before her landslide election win.