John McDonnell has urged the government to adopt a "radical recovery programme" to protect the public from the rising cost of living.
The former shadow chancellor said incomes needed to be boosted and prices and rents controlled in response to inflation hitting a 40-year high.
The left-winger, who is now a backbencher, called for an immediate increase in benefits and pensions of 8 per cent to protect the lowest-paid – as well as inflation-proofed payrises for workers.
And he called for a "programme of price controls" including a profit cap on energy companies, lower transport fares, and a rent freeze.
The Labour MP said the government should also start investing in insulating 27 million homes to create "hundreds of thousands of jobs, reduce bills and save lives".
In an article for the LabourList website Mr McDonnell said that "after 40 years of neoliberal dominance, most people do not have the economic resilience to cope with the cost of living hit they are now experiencing".
He added: "In every other period of history when inflation combines with wage cuts, and people struggle to pay for the basics in life, confronting a real cost-of-living crisis, that’s when people get angry.
"It’s when they see the system is failing them. It’s when they demand change and are increasingly open to radical change.
"All those who want radical change, and that should include the Labour Party, must not underestimate the potential of this moment. This is no time for half-hearted measures. We need a Radical Recovery Programme".
Mr McDonnell's call goes further than the policies of Labour's current frontbencher under Keir Starmer.
Sir Keir has called for a cut in VAT on home energy bills, which his team says would reduce the increase in energy bill prices by £200.
The opposition says it would give a further £400 in targeted support to the worst off. Energy bills are expected to rise by an average of £700 in April.
The government has meanwhile said it will give households £200 discount on energy bills, but said it will claw back this money by increasing bills in the future.
