Labour’s Budget: Why Your Pay Might Not Rise as Fast as You’d Hope
On Wednesday the Chancellor unveiled Labour’s first budget in 14 years, announcing a hefty £40 billion tax rise. She’s been straight about the fallout: wages may lag behind the increase in taxes.
National Insurance – The Pay Hike Problem
The increase in National Insurance will mean companies will absorb more of the cost, which, in turn, can slow down pay rises for many workers. “It’ll be a bit tougher to get the same bump in your salary,” the Chancellor admitted.
What the Budget Office Says
According to the Office of Budget Responsibility, overall household incomes will still climb this parliament. “It’s a sharp improvement over the last one, which was the worst for living standards ever,” she noted.
Jeremy Hunt’s Take
- “We’ll see lower living standards”, he warned.
- Prices will climb, jobs will shrink, and mortgages will get pricier.
- “It’s going to be tougher for ordinary people,” he added.
Hunt also pointed out that the Chancellor’s promise before the election to keep taxes in line with the Labour manifesto seemed out of touch, given the sheer scale of the tax raise now on the table.
The Bottom Line
Even with a boost to household incomes, be ready for a budget that can tighten budgets, ramp up prices, and potentially slow the growth of everyday pay.
