The typical household in the UK has seen disposable income drop by 15 per cent in the last year as food prices and utility bills soar.

Disposable income now represents 28 per cent of average household income, down from 35 per cent a year ago, according to a survey published on Monday by uSwitch.com, the price comparison website. This is the equivalent of £14,520, down from £17,102.

On one level the figures are unsurprising given the well-publicised double-digit rises in the prices of many staples ranging from petrol to a loaf of bread.

But the survey quantifies the pressure on household finances which has helped to erode Labour’s popularity at the ballot box. Prices have risen by 28 per cent for gas, 20 per cent for electricity, 28 per cent for petrol and 25 per cent for food and drink.

The average family is also spending 6 per cent more on mortgage repayments as a result of higher interest rates.

People living in Newcastle are now spending 77 per cent of their net income on bills – far more than the 35 per cent spent by those in Surrey or Buckinghamshire.

It’s not hard to see why the Scottish National party will be campaigning at the next Scottish by-election, Glenrothes, on the cost of living. This was the clinching factor in Glasgow East.  

You could almost feel sorry for Labour…if they hadn’t taken the entire credit when times were good.

Back in February the prime minister said in his monthly press conference that it was “entirely possible” the government could sell Northern Rock at a profit. Eventually.

But now we know that Goldman Sachs was - in the same month - advising the Treasury in private that taxpayers would lose at least £450m from the nationalisation, even under a best-case scenario.

The US investment bank believed that a £1.28bn subsidy was the “base case scenario”. It’s not yet clear what the worst-case scenario would look like.

In one sense this is now historic. Earlier this month we saw the Treasury potentially write off up to £3bn of loans to Northern Rock by swapping them for equity. (Bad for taxpayers because creditors come ahead of shareholders in the queue if the business is wound up or sold at a loss).

The question is: Did Brown make his comments about a possible profit before or after he received the Goldman advice?

UPDATE

The Treasury have just come back to me. The Goldman advice was made between February 4 and February 17 (the day of nationalisation).

Therefore Mr Brown already knew that a profit was phenomenally unlikely.

That will be the inevitable response within most of the Labour party to the imminent departure of Lord Jones of Birmingham, former head of the CBI.

One of the “goats” (non-partisan ministers in the, ahem, ‘government of all the talents’) hired last summer by Gordon Brown, he was hardly an outright success.

Seen as a natural Tory, he wouldn’t join Labour or even pretend to back many of its policies. Most strikingly, he carried on opposing the minimum wage - years after most business leaders had given up this fight. (Bear in mind that the CBI predicted 100s of 1000s of job losses from the original measure, which turned out to be nonsense).

Jones carried on driving a Jaguar - while the cabinet debated driving green vehicles and Mr Brown persistently talked the talk about electric cars.

And he refused to tone down the outspoken, bluff persona. At a gathering of Arab businessmen, he said: “We don’t care what colour you are, we don’t care if we can’t pronounce your names . . . we just want you to invest in our country.”

And then there was the FT interview where he single-handedly undermined the new tax on non-doms, prompting the first of several damaging fiscal U-turns by Alistair Darling. 

We already knew Lord Jones was stepping down before the next general election; now he says he will quit later this year. He is no doubt a “character” and admirable in many respects. But did he ever belong in a Labour government?

The parallels are uncanny.

A party, in crisis after years in power, deposes the politician who has dominated domestic policy for the last decade.

Riven by internal rivalries, it plumps for the compromise successor who represents consensus and no change.

Who cares that he is low-profile, not desperately charismatic, has no obvious policy ideas and does not seem to be made of leadership material?

For John Major, read Alan Johnson.

A fortnight ago the mood music from within the unions, the Parliamentary Labour Party and the constituencies was that Mr Johnson would be the key man if Gordon Brown was deposed. He could forge a “dream ticket” with David Miliband to run the party/country.

Now, more and more are pondering if he should stand in his own right as the stability candidate if there is a leadership election (not yet a given).

He’s not from the right (unlike Miliband), nor the left (John McDonnell) nor the unions (Jon Cruddas).

He came second in last year’s deputy leadership election. The man himself has been saying nothing. Presumably he is on holiday; but who knows? His silence - and generally low profile as health secretary - has allowed him to become a blank canvas on to which Labour people can project anything they like.

He has a good life story. Left as an orphan at 12, brought up by his older sister in a London estate, he stacked shelves at Tesco before becoming a postman. He is less disliked in his party than Miliband.

Major, you may remember, was also from humble London origins. He left school at 16 and was so bad at maths that he was rejected for the job of bus conductor. He was less disliked in his party than Michael Heseltine.

 Unfortunately Major, ejected in 1997 by a landslide, did not go down in history as a triumph.

I’ve never quite seen the Heathcliff analogy myself.

Much more accurate would be to compare the British prime minister to curmudgeonly Inspector Rebus, the hard-boiled cop from the Ian Rankin mystery novels.

It’s all there. A principled but dour Scot, born in Fife, raging against the world around him.

Skimming through a Wikepedia profile of Rebus comes up with some incredible similarities.

1] “He has to deal with his own personal issues”

2] He is surrounded by “internal politics” in his workplace

3] “His clothes are often less than immaculate”

4] “His advancing years and approaching retirement means he is unlikely to receive another chance”

5] “(His) gruff exterior and fierce will to succeed in his field belies a benevolent nature.”

 6] “An intimidating personal manner” 

7] “Rebus is ‘married’ to his job”

Incidentally, the PM has read most of the Rebus books. Another website offers the following from the official Ian Rankin website:

“He’s approaching 60, but with a bit more flesh on the bones - both literally and metaphorically - and he’s also a little more disillusioned, fighting a few more demons”….

I believe it was Viz’s Profanisaurus which coined the term “the fecal touch” as the opposite of the Midas touch. The expression comes to mind as the Treasury lurches through yet another crisis, this time over whether or not it’s going to change stamp duty to give the gift of negative equity to naive youngsters  bring much-needed solace to the housing market.

It’s getting easy to lose track of the litany of screw-ups and volte-faces - from losing discs to U-turning on capital gains tax and non-doms….not forgetting the mother of them all, the £2.7bn compo package for the abolition of the 10p tax rate.

It’s hard not to sympathise with Alistair Darling over the stamp duty issue. After all, chances are that the original leak didn’t come from the Chancellor or his officials in the first place. But he’s now under increasing pressure to explain what he’s going to do.

Last night the head of the National Association of Estate Agents told me the situation was like the 1988 abolition of shared Miras relief, widely regarded as a monumental disaster. Nigel Lawson, then chancellor, made the mistake of saying in his April budget that the tax would be abolished in August. The result: a stampede of people buying homes with siblings, friends and acquaintances to beat the deadline. It stoked up a housing market which was already in bubble territory - prices in London rose 13 per cent in just four months. 

Today we have the same thing in reverse; thousands of people who would have bought a home (and already had misgivings about losing money) will now sit on their hands to find out if they’ll get a tax break.  

The talking point this morning in Westminster - for those who haven’t escaped to a beach - will be this fascinating article in the Daily Telegraph.

David Miliband’s spokeswoman told me last night, definitely, that the story (”Miliband lines up Milburn for the Treasury) was “complete nonsense” and that there was no leadership plot. Alan Milburn said today: “I told the paper yesterday it was complete bollocks and I am amazed that they have run with it.”

The tale does have an air of plausibility, however, at least in terms of Miliband (or his people) discussing with Alan Milburn the possible configurations of a future cabinet which would include him.

But has Miliband actually offered the job of Chancellor - second most important political post in the UK - to the former health secretary?

To quote the Telegraph: “Mr Milburn…is understood to have told Mr Miliband he would be happy to accept the Treasury”.

That is not the same thing.

In strategic terms, meanwhile, would Miliband (seen as a Blairite) lose support within the Parliamentary Labour party from having such a prominent uber-Blairite as his Chancellor? (See my blog from Monday). His power base is already weak among the unions and the leftwing grassroots, where there is no love lost for Milburn either.

I bet the Brownite coterie are kicking themselves for not starting the Milburn rumour themselves………

The facts first. Reports of a stamp duty holiday for all home buyers appear to be wrong.

Instead, the Treasury is considering the “deferral” of stamp duty; just for first-time buyers. They would have to pay the money back in the future, a bit like a student loan.

So not necessarily a big vote-winner then.

More importantly, would a stamp duty freeze kickstart the property market? I doubt it. Sales have frozen because banks will no longer lend as much as a year ago; as simple as that.

So, a typical first time buyer purchasing an average home (£180,000) has a dilemma. Last year he could borrow, say, £150,000. Now he can only borrow, say, £110,000. Unless prices drop further, he has a £40,000 hole in his finances.

Not paying stamp duty on this purchase would save him - falling in the 1 per cent bracket - a mere £1,800.

It’s a token gesture; no more.  

PS

As an afterthought - if anyone doubts me - take a look at almost any newbuild scheme in the UK. A year ago you could get a discount of 5 per cent. Now you can haggle 20 per cent off a new flat.

And still no one is buying.

PPS

We pointed out weeks ago that the stamp duty take is already set to plunge this year. Which is a separate headache for the Treasury. (The £10bn figure includes commercial property)

This should be THE crucial question for Labour as the party faces the possible prospect of civil war over leadership, direction and policy.

The left, and the unions, want to reach out to core Labour voters with policies such as more affordable housing and a windfall tax on energy companies.

The right wing of the party wants to continue on the Blairite path; pro-business, pro-choice, pro-reform, etc.

They are lampooned by Alan Simpson, the leftwing MP for Nottingham South, as: “A group of ex-ministers cruising the corridors and cafeteria of Parliament in search of stray MPs….a group of 20 or so ex-ministers (mostly junior ones) meeting to discuss how they could maintain the flame of the Blairite revolution.”

The dilemma for the leadership - and the grass roots - is trying to deconstruct how much of Tony Blair’s popularity was down to his policies (Iraq war, foundation hospitals, academies, PFI, etc) and how much was down to his personality (persuasive, charismatic, telegenic etc) - at least in the early years.

I suspect the latter has played more of a role than anyone - including Blair’s closest acolytes - would ever admit. Would the Blairite agenda really be a vote-winner in the hands of less persuasive politicians such as Stephen Byers (pictured below) or John Reid? Not necessarily. 

The next cabinet meeting will be in the West Midlands on September 8.

This is a break from the usual tradition of holding it at No 10 - and will be the first of more cabinet gatherings in other parts of the country. The idea is to listen (and be seen to be listening) to the concerns of punters out there in the real world.

I believe the idea was mooted in a paper from Hazel Blears a few months ago. Cabinet ministers will spend the rest of their day out in Birmingham (or wherever it is) holding meetings and sessions with locals.

No doubt the idea will be derided in some quarters. At least they’re making an effort to prove they’re making an effort though.