This Fabian Society report, in partnership with Fair By Design, finds that in 2022 the ‘poverty premium’ cost UK poor households £444 more for essentials (latest figures). ‘Cost Cutters: A plan to tackle the poverty premium and make markets work’ says that the government and regulators pass the buck over who is responsible for making markets work for everyone. It recommends that the government and regulators should take immediate action to cut costs alongside long-term reform that puts consumer voices at the heart of regulators’ decisions.

Price rises since the October 2022 mini budget have made the cost of living crisis a catastrophe for poor households facing the ‘poverty premium’.  The report shows how low income families pay more for broadband, energy, financial services, food and water.

Each of these separately regulated markets has failed poor households in different but connected ways.

The report recommends that the next government reforms markets for essentials. It recommends an immediate and comprehensive ‘Cost Cutting Plan’ which would save low income families an estimated £220 per year, without the need for any additional public expenditure. It also recommends that the next government should work towards implementing a new energy social tariff, which would save eligible families around £340 per year.

The next government must act to ensure consumer voices are heard, says the report. The government should appoint consumer representatives to make up a third of the board of every regulator of essential markets. It should also require regulators to consult with a new consumer committee when setting their direction and major policy interventions.