Miliband's 'Cost of Living Crisis' Hands Labour New Year Boost over Tories

Welcome to 2014, the year when the political battle over David Cameron's "long term plan for recovery" and Ed Miliband's "cost of living crisis" will become more bloody and aggressive as next year's election looms ever closer.

And as the nation crawled back to work after the Christmas holiday, it was the cost of living that immediately dominated the headlines and handed Labour the opportunity to inflict some early damage on the government.

First, commuters were battered by the now-traditional rail fare rise which, this year, averaged 3.1%, adding hundreds of pounds to some travellers' annual bills and racing three times ahead of wage increases.

In just one example, regular commuters travelling from Swindon to London will pay £8,000 for a season ticket. Ministers' remarks that, in effect, it could have been worse as this year's rise was the lowest for four years, will cut little ice there.

To make matters worse, there were reports that at the current level of increases the government, which owns 30% of the business, will be making a profit from passengers by 2018.

Cash cow

Secondly, on the day the "Big Six" power firms attempted to regain lost ground by introducing the simplified tariff system originally ordered by David Cameron, they stood accused of overcharging consumers by £150 over three years by buying power at inflated costs from their own companies.

The practice was one of the allegations put to energy bosses when they appeared before a committee of MPs last year but which they denied, despite some MP's claims they were being deliberately opaque.

So, on the first back-to-work day of the new year, two issues which ministers might have hoped would offer some relatively good news – simplified energy bills and lower than usual fare rises – became instant bad news stories and once again put the cost of living at the top of the political agenda.

Rail minister Stephen Hammond defended the fare increase, pointing out it was in line with inflation, and described as "nonsense" the idea rail was being used as a "cash cow" by the government.

He also confirmed suggestions the government was considering scrapping some first class rail carriages to offer more seats for standard fare passengers.

But the opposition seized the moment, with shadow transport secretary Mary Creagh saying a Labour government would introduce new controls and caps on fares.

At the same time, Ed Miliband's agenda-setting proposal to freeze energy bills was given a new lease of life after the companies plans to simplify tariffs came under fire and amid claims they were artificially hiking raw energy costs.

The supplier's body, Energy UK, said the tariff changes would "help people get the best deal" on their energy but consumer groups said the system was still too complex and confusing for customers and Labour said only its freeze would help consumers.

Shadow energy secretary Caroline Flint also hit out at the regulator Ofgem over the alleged overcharging, asking why it had allowed companies to buy electricity from themselves.

The Big Six were also facing a fresh grilling from MPs over their reaction to the blackouts over Christmas which saw thousands left without power over the entire holiday period.

Claims that unexpectedly bad weather was to blame are unlikely to be met with approval.

Tory jitters

But, if 2014 started badly for David Cameron, he still believes this will be the government's year as the economy continues to grow and voters start to feel the effects of that growth or, at the very least, believe they will feel the benefits if they stick with the current strategy.

There are, however, a couple of hugely significant events that are already looming out of the mist – the European parliament elections in May and the Scottish independence referendum in September.

There is real worry in Tory ranks that Ukip will win the Euro poll, pushing the them into second place, at best. But there is also the belief that the result will be a classic protest that will not translate into a general election performance for Nigel Farage's party.

It is also the case that there have been such apocalyptic predictions that, should Farage fail, Cameron could receive a significant boost.

That, however, has done little to calm jittery Tory nerves amid fears Ukip may still do enough in the general election to deny them outright victory.

Then there is the independence referendum. In the still unlikely event that Scots vote to go it alone, both Labour and the Tories would suffer as they have headed the "Better Together" campaign.

But the damage would likely be worse for Cameron and the Tories (once the Conservative and Unionist party) as it would be portrayed as a significant judgement on a "Tory England" regularly running a determinedly anti-Tory Scotland.

Thoughts that independence would boost the chances of the Tories forever winning general election majorities are not only inaccurate wishful-thinking but also of little comfort to the party which continues to be Unionist at its heart.

The most likely outcome of a "no" vote will certainly boost Cameron but, as he has deliberately and understandably kept well out of the campaign, that boost may prove short lived. Labour's Alistair Darling, who is leading the Better Together campaign, will win the plaudits.

Whatever else happens, and it is so often the unforeseen events that decide parties' fortunes, 2014 will certainly provide one historical footnote. Thanks to David Cameron's decision to introduce five year fixed parliaments, it will be seen as the year that ushered in the beginning of marathon-length election campaigns.

You have been warned.