July 14, 2015


The big change that the chancellor talked about in the budget was the creation of what he called a National Living Wage.

We already have a National Minimum Wage, which was created by the Labour government in 1999.
And we already have a living wage, which in Merseyside is £7.85 an hour.
The living wage is not a legal requirement while the minimum wage is at £6.50 an hour.
So you might be forgiven for thinking that the National Living Wage might be at or above the current figure of £7.85 an hour.
But no, the figure presented by George Osborne, the chancellor, was £7,20 an hour or 65p an hour less than the current living wage, which is independently calculated and by the way it will
not apply to you if you are under 25.
So much for helping working people.
And it gets worse. Because the chancellor may have promised an increase in pay for some of the lowest paid workers but he also announced a big tax rise for 11 million people in work with a new work penalty.
He is cutting tax credits and those 11 million people will be £260 worse off on average. Three million of those people will lose up to £5,000 a year each and remember it is families of people in work who will lose most.
So those who gain from the incorrectly named National Living Wage will lose far more from the work penalty if they have children.
Yet the chancellor claimed he was presenting a budget for work.
Sadly the reality was rather different and with lower than expected productivity, the prospects for higher wages to offset the cuts in pay from the work penalty mean that Britain is moving towards being a low wage economy.
And that’s why I am arguing for a rather different approach.
We need to improve productivity, so people can be paid more for doing more in the same amount of time.
And for that to happen, we need to invest in skills and education.
We also need better transport links both road and rail to help businesses and a better banking system to support businesses who want to grow and create jobs.
Britain should be a high skill, high wage economy and I shall do my best to argue the case for
such a future.
The chancellor, George Osborne has mad the wrong decisions if he serious about doing the same and I shall be challenging him to change track.

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