New figures show that the average earner in London will see their earnings fall by £1,737 in the next year alone, relative to inflation, under the plans announced by the Chancellor in his recent Spring Statement.
It has emerged that not only would working people still be hit with the biggest tax burden since the 1940s – but that living standards look set to plummet at the fastest rate seen since records began.
Mayor John Biggs has lobbied the Government to scrap the damaging, unfair National Insurance rise, and to choose a one-off windfall tax on oil and gas producer profits instead – to take up to £600 off the energy bills of households struggling with the rising cost of living crisis.
In the latest council budget for the new financial year, the Tower Hamlets Labour Group acted to stand up for residents in these uncertain times. A variety of measures proposed by the Labour Group to tackle the cost of living crisis have now been agreed:
- Freezing the council’s portion of Council Tax.
- Protecting the Council Tax Reduction Scheme to ensure the borough’s poorest households are supported by reducing their Council Tax bill, by 100% in some cases.
- Providing a £200,000 boost to the current £600,000 Resident Support Scheme, offering additional support to those most in need struggling with energy bills and buying them some breathing space.
- Protecting funding for universal free school meals for all primary school children in the borough, saving families £450 per child.
- Investing millions more in services like social care and early years, as well as additional funding to support older residents, carers, and special educational needs and disabilities (SEND) services.
Leader of the Tower Hamlets Labour Group, Mayor John Biggs said:
“The Cost of Living Crisis is hitting struggling families in Tower Hamlets, and all we have received from the Chancellor was a vague promise of support tomorrow rather than the support that is desperately needed now.
“We are continuing to do our best to protect the universal services our residents rely on during these uncertain times, and our strong record in tackling poverty in the borough shows the difference a Labour Council can do in the face of such economic difficulties. But a long term plan for productivity, skills and growth from the Government is needed. In failing to provide this in his Spring Statement, the Chancellor made the wrong choices for East London, and our country.”
- The OBR Economic and Fiscal Outlook, published alongside the Chancellor’s spring statement, reveals that forecast average earnings growth is expected to fall well short of forecast inflation in both 2022 and 2023. Cumulatively over that period, the OBR forecast that earnings will fall by 3.5% relative to inflation. That means the real value of earnings will decline. https://obr.uk/docs/dlm_uploads/CCS0222366764-001_OBR-EFO-March-2022_Web-Accessible-2.pdf Table 1.1 Page 12
- The Office for National Statistics Annual Survey of Hours and Earnings provides information on the average pay of full-time workers in 2021 for each region and nation of the United Kingdom. https://www.nomisweb.co.uk/ annual survey of hours and earnings – resident analysis, mean gross annual pay for full time workers
- Applying the figure of -3.5%, the forecast fall in real earnings between 2021 and 2023, to these figures provides a forecast of the fall in average pay in each region and nation, relative to inflation.
- REGION CHANGE IN AVERAGE PAY 2021-23, RELATIVE TO INFLATION
|Region||Average Pay 2021-23, Relative to Inflation|
|Yorkshire and the Humber||-£1,170|