An economy that works for everyone
Did you know that most working people in Britain today are earning less, after inflation, than they did ten years ago? And that’s with inflation having been at very low rates. Inflation is now at 2.7% and heading upwards. With average wage rises at 2.3% we are only getting worse off. Even the Bank of England has warned that living standards will fall this year as inflation grows faster than incomes.
But what do these averages mean? Averages disguise the biggest and the smallest numbers. An average wage rise of 2.3% does not mean that’s what everyone gets. Official figures for 2016 showed only a 0.7% rise for workers in the public sector. Plus what does a percentage mean? 0.7% of the Minimum Wage for someone over 25 is about £18 per week. For someone earning the average UK salary of £27,600, it’s £37 per week.
Most people having their incomes squeezed is not just bad for them, it’s bad for the economy. The latest economic figures for the G7 show the UK economy has fallen to the bottom of the group for growth in the first quarter of this year. One reason for this is that the growth of our economy depends on consumer spending. With prices rising and income not keeping up, of course consumer spending is hit. What’s more, debt charities warn that households are borrowing at record rates and point to the dangers for families and economies when debt bubbles burst.
So what can we do?
We can invest in infrastructure, which means creating jobs and also creating assets like houses, railways and broadband that we can all benefit from. We can put more money into the hands of the lower paid who will spend that money, supporting the economy through consumer spending without having to go into debt. We can provide the right conditions for innovation, which produces higher paid, secure and satisfying work.
Our manifesto sets out how we can build a dynamic economy that works for all. The key is our National Transformation Fund which will provide £250 billion over 10 years, investing in our infrastructure and the green and cutting-edge industries of the future. We will have an industrial strategy that looks to the long term, like Germany does, and we will make sure that our strategy works in all regions of the UK. Today Jeremy has talked about how we will create at least a million decent jobs, jobs which pay a real living wage and give people a sense of pride and purpose.
A vote for Labour on June 8th is a vote for the future of our economy.