Walton's Wages

(December 02, 2014)

Steve and Ed Balls u-Turn

Tomorrow the Chancellor will deliver the Autumn Statement. Walton MP Steve Rotheram looks ahead to it:

"We have been totally misled over the last four-and-a-half years about this government's economic record. It's a disaster. George Osborne has a worse record for failure than any Chancellor in living memory. He promised the country he would get rid of the deficit inside one parliament. He has failed. And not by a small margin. Not by 10 or 20 percent. Not even by 50 percent. Osborne has missed is target by more than 62 percent. It's a staggering failure in the modern age.

"The long term economic plan is a smokescreen when workers in Liverpool Walton are currently on zero hours contracts and in part time and low paid work.

"Whilst I am grateful for any increase in real, taxable employment, the recently announced fall in unemployment needs proper scrutiny to ensure the exchequer is truly benefiting from tax receipts. I have fears that those on benefit sanctions in Walton, actually make up a considerable amount of people who are now classed as “in work”. 

"The test of whether the economy has recovered is not in some IFS report or YouGov poll. It comes in the wallets and purses of ordinary people. When people have more disposable income and their salaries are no longer immediately swallowed up paying the energy bills or rail fares or coping with the increases in VAT, then the Treasury might be able to pat themselves on the back, but in Walton that is a long way off".

Real Story on Wages: What the Chancellor won't tell you...

  • The Tories try to claim that the cost-of-living crisis is over and our economy is fixed. But the reality is that this is a recovery for the few, not the many. Real wages have continued to stagnate. This has not only hit working people, but has undermined the public finances as receipts from income tax and national insurance have failed to recover.
  • Real median wages for all employees have fallen by more than £1,600 a year since 2010. Full-time workers have fared even worse, with real wages down by more than £2,000 over the same period.
  • In November 2010 the Office for Budget Responsibility was forecasting real wage growth across the Parliament of 6.5%, yet in reality real wages are now set to fall over this period instead. This failure in real wage growth across the Parliament means that income tax receipts have not recovered as expected, making it harder to get the deficit down.
  • This squeeze on pay is historically unprecedented. Since the start of 2008 when the global financial crisis hit real wages have fallen by almost 9% when adjusted for CPI inflation. By this stage following the last recession, which began in 1990, real wages had already risen by around 10%.
  • Over the course of this Parliament working people are set to see the biggest fall in wages of any Parliament since 1874-1880. And it’s set to be the first time since the 1920s that people are worse off at the end of the Parliament than they were at the beginning.
  • The stagnation of real wages means that working people are finding that it is more difficult to pay bills such as energy, and to take key steps such as buying their own home. And as the gap between pay and housing costs gets wider, the public finances are hit again by a rising housing benefit bill.
  • The Tories have failed to boost the housing supply, with house-building at its lowest peacetime level since the 1920s and less than half the number of homes we need to keep up with demand being built. Home ownership has declined to its lowest level in almost 30 years and by 2020 the average deposit for a home in the UK will be £72,000.
  • Nine million people now rent privately including over 1.3 million families with children.  Renters are now paying on average over £1,000 a year more in rent than in 2010, and renting is now the most expensive form of tenure.  This, combined with stagnant wages, means more and more working people are relying on housing benefit to make ends meet. In addition, the OBR has highlighted how rent inflation has been higher than expected, also helping to push up the number of people eligible for housing benefit.

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