The economic recovery has passed most people by, with households being excluded from the benefits of growth, a union leader will warn today.
TUC general secretary Frances O'Grady will tell a conference that the economy has grown by £60 billion in the last four years, but real household disposable incomes have increased by only £1 billion.
Once population growth is taken into account, disposable incomes have fallen by almost £500 per person, she will tell the annual conference of the Centre for Labour and Social Studies think tank.
"The historic link between economic growth and rising incomes has been broken under this Government. Households are being excluded from the benefits of growth. Unless this changes, the recovery will be meaningless to the vast majority of people across Britain.
"The Government has belatedly woken up to our cost of living crisis. But ministers are desperately short of solutions because they're still not prepared to challenge the 'market knows best' ideology that has somehow survived the biggest global crash since the 1930s," she will say.
A Treasury spokesman said: "The Government's economic plan has got all sectors of the economy growing, the deficit falling and jobs being created. This is the only sustainable way to raise living standards for hardworking families.
"The Government appreciates that times are tough, and has taken continued action to help families with the cost of living, including cutting tax for 25 million people and taking 2.7 million people out of income tax altogether by 2014; freezing fuel duty so that petrol prices are 13p per litre below where they would otherwise have been; and providing working families with support for the costs of childcare."
Treasury aides said: "Labour's trade inion paymasters should remember it is Labour's economic mess that has hit living standards. Despite this, our plan is slowly but surely working - the economy is growing, the deficit is falling and jobs are being created - that's the only sustainable way to raise living standards.
"As we deal with Labour's deficit, we are also taking steps to help hard-working families along the way, such as cutting income tax for 25 million people; freezing fuel duty and council tax; and providing tax-free childcare.
"But Labour's alternative of more borrowing and more debt would mean higher taxes and higher mortgage rates - making hard-working people worse off."