Are you feeling the pinch? Jeremy Hunt did a bit of pinching last week, or perhaps it was more sleight of hand using a stealth tax. There was a lot of focus on reducing tax at the Autumn Statement, but the reality is that Hunt froze tax bands, which means that the UK tax burden is set to reach its highest level for 75 years.
Wages are now set to remain below their 2008 level until 2028.
For the first time ever, real household disposable income will be lower at the end of this parliament than the start, leaving households £1,900 poorer.
Household energy prices will rise in January putting more financial pressure on hard pressed households at the coldest time of year. Energy regulator Ofgem said the typical annual household bill would go up from £1,834 to £1,928, a rise of £94 or 5%.
Ipswich Borough Council (IBC) are working to help people through difficult times.
IBC is proud to be accredited as a Real Living Wage employer. The real Living Wage is the only UK wage rate based on the cost of living. It is voluntarily paid by over 14,000 UK businesses who believe their staff deserve a wage which meets everyday needs – like the weekly shop, or a surprise trip to the dentist.
The Real Living Wage went up to £12 an hour on 1st November and is higher than the Living Wage, which will be £11.44 from 1st April. Real Living Wage earners earn £1,000 a year more that the Living wage earner.
The Local Welfare Assistance Scheme (LWAS) is also available for Ipswich residents and nearly 350 Ipswich households each month are benefitting, with an average payout of £260. Only two applications per year are allowed. The scheme includes assistance with household furniture and white goods, fuel vouchers (electricity and gas top-ups), supermarket vouchers, food boxes and contributions towards utility bills.
Local Housing Allowance (LHA), the cap on the amount of housing benefit tenants in the private rented sector can receive, was designed to cover rental costs in the cheapest 30 per cent of properties in an area.
The Tories have frozen this since 2020 despite private rents rising sharply to their highest recorded levels.
The Autum Statement decision to unfreeze LHA will benefit 1.6m households nationwide by an average of £800 next year. I have been involved on lobbying for this via the District Councils Network. This will make a real difference to families who are desperate to keep a roof over their heads. This uplift won’t be implemented until April 2024, unlike the election bribes, which will be introduced from January.
During the austerity years, former chancellor George Osborne and his successors made more than £30bn in spending reductions to welfare payments, housing subsidies and social services.
Ahead of the last general election in 2019, former Prime Minister Boris Johnson promised there would be no return to austerity.
Looks like austerity will be making a comeback under Hunt. Public services, including courts, prisons, further education, local government, housing and others will see a cumulative 13% cut in day-to-day spending over the next five years, when taking the impact of inflation into account. At a time when the UK tax burden is set to reach its highest level for 75 years, public services will face budget cuts of more than £20bn by 2027-28.
Labour’s mission will be to deliver lower bills, good jobs and a growing economy. It is time for a government with a plan to make everyone, not just a few, better off. A general election can’t come soon enough.