"The UK over the last 10 years has created a lot of jobs, but today real wages are below where they were in 2007. That is not the capitalist system delivering its promise that over a decade or so it will raise all boats, and it is a very fundamental issue." Lord Adair Turner, the former head of the Low Pay Commission
Workers can expect an unprecedented two lost decades of earnings growth and many more years of austerity as a result of the marked slowdown in the economy announced in Philip Hammond’s budget. Average earnings are on course to be £1,400 a year lower in 2021 than forecast in 2016. That means the recovery in wages will have failed to materialise and average earnings will be below their 2008 level adjusted for inflation.
The Institute for Fiscal Studies said in its traditional post-budget analysis that forecasts slashing productivity, earnings and growth in every year until 2022 made “pretty grim reading”, and predicted that even by the middle of the next decade, Britain’s public finances would still be in the red.
Paul Johnson, the IFS director, said “We are in danger of losing not just one but getting on for two decades of earnings growth. We will all have to get used to the idea that steadily rising living standards may be a thing of the increasingly distant past.” Johnson said that despite the extra cash for the NHS, the government’s main austerity plans were still in place.
Workers can expect an unprecedented two lost decades of earnings growth and many more years of austerity as a result of the marked slowdown in the economy announced in Philip Hammond’s budget. Average earnings are on course to be £1,400 a year lower in 2021 than forecast in 2016. That means the recovery in wages will have failed to materialise and average earnings will be below their 2008 level adjusted for inflation.
The Institute for Fiscal Studies said in its traditional post-budget analysis that forecasts slashing productivity, earnings and growth in every year until 2022 made “pretty grim reading”, and predicted that even by the middle of the next decade, Britain’s public finances would still be in the red.
Paul Johnson, the IFS director, said “We are in danger of losing not just one but getting on for two decades of earnings growth. We will all have to get used to the idea that steadily rising living standards may be a thing of the increasingly distant past.” Johnson said that despite the extra cash for the NHS, the government’s main austerity plans were still in place.
“This is not the end of austerity. It is not even nearly the end of austerity. There are still nearly £12bn of welfare cuts to work through the system, while day-to-day public services spending is still due to be 3.6% lower in 2022-23 than it is today,”
- Despite a spending increase over the next five years, the NHS is facing its tightest funding constraints since the 1980s. Annual spending growth of 4% a year after inflation before the financial crisis has fallen to 1% a year at a time when the NHS is being stretched by an expanding and ageing population.
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