A RESPONSE by the Harlow Labour Party to the Chancellor of the Exchequers’ budget

THE Chancellor’s budget doesn’t go anywhere near far enough to tackle the issues that the people of Harlow are facing. What it gives with one hand is very quickly taken away with the other. The decisions taken by Chancellor Rishi Sunak will only make the cost-of-living crisis worse.

The rise in minimum wage is welcome, but while it may seem like a lot – going from £8.91 to £9.50 per hour – with planned hikes to National Insurance payments from spring 2022, a full time worker on minimum wage is only likely to see a £700 increase per year. Couple this with rising inflation, taxation and the cost of living in terms of fuel and energy prices, and the headlines about the minimum wage increase lose their shine, somewhat. The Insititute of Fiscal Studies (IFS) Director, Paul Johnson, explains: “Before tax, about half of the 6.6% increase in the minimum wage will be eaten up by inflation over the next year, meaning a real-terms rise of about 3.2%. After tax this will become a 1.2% real increase in take-home pay for a full-time minimum wage worker.”

And what of that 1.2% increase? What should people spend it on? Getting to work, perhaps. While our MP has constantly shown himself to campaign for cheaper fuel prices, Harlow residents are facing the highest prices in living history – to fill up an average size family car in Harlow will cost over £70.  

Those on minimum wage will not be alone in feeling the pinch, as middle earners will experience rises in inflation and tax, meaning that in real terms their take home pay is set to decrease by approximately 1%. This is bad news for businesses too, as there will be fewer people with expendable income.

For those households without someone in paid work, the next few months will be especially tough as prices continue to rise while benefits stay the same – after the removal of the £20 per week Universal Credit uplift, something that people will be adjusting to now. It’s also worth bearing in mind that the removal of the uplift will affect thousands of families in Harlow, as according to May’s DWP figures, there are over 9,500 households in receipt of the benefit.

The government has chosen, rightly, to remove the Pay Freeze on public sector workers. Labour has argued that this should never have been introduced in the first place. Public sector workers were some of the people who keep this country running during the Covid-19 crisis. Doctors, nurses, teachers and all other public sector staff will see no immediate change to their pay packets and will have to wait for their own settlements which will take months. Inflation is also outstripping any rises that people may see in their wages in the future.

With the Climate Change Conference COP26 in Glasgow only a few days away, this was a chance for the Chancellor to set out his stall on how he was going to tackle the biggest challenge facing this country. It had the potential to re-ignite the economy with a green approach, or at least, consider it, for a moment. Instead of tackling this issue head-on, he has chosen to dither and delay, with the biggest decision coming in the form of the halving of taxes on domestic flights – with air travel already being cheaper to use than trains, whilst also being more polluting.   

This budget falls woefully short in tackling the issues facing residents of Harlow. Instead of rewarding those who keep our country going through the Covid-19 crisis, they have yet again been told to wait. Many people will be facing tough choices this winter and don’t have the luxury of waiting. The Chancellor could have helped these people in this budget, instead, he has chosen not to.