Sluggish wage growth means the average employee is £3,500 a year worse off since the Conservatives came to power, according to Labour analysis of Treasury figures before chancellor Philip Hammond’s first autumn statement next week.
Compared with the average wage growth under Labour, full-time employees are £67 a week or £292 a month worse off, the party’s report found. The analysis compared the average annual percentage change in wages in the six years of the Conservative and coalition governments, which is 1.3%.
In contrast, the average growth under the last Labour government was 3.2%, though growth fell significantly post-2008. Labour will use slow wage growth as a key argument against plans to cut universal credit, which Hammond is being urged to reverse in his autumn statement on 23 November.
Damian Green, the work and pensions secretary, has said the government will not make any more immediate welfare cuts after the UK’s vote to leave the EU in order to focus on economic recovery, but said cuts already announced would go ahead as planned.
John McDonnell, the shadow chancellor, said: “We have known for a long time that the government has failed to make good on its promises to ‘make work pay’; we have had sluggish wage growth and a failure to return wages to their 2008 peak. That’s why Labour is calling on the chancellor, in the upcoming autumn statement, to reverse the damaging cuts to universal credit still planned for the remainder of this parliament.”
Labour will also focus on the self-employed in the party’s response to the autumn statement, with the shadow work and pensions secretary, Debbie Abrahams, highlighting the gaps in the national insurance framework for freelancers or small business owners, who make up 15% of the workforce.
In a speech on Monday, Abrahams will call for changes to the current system in which self-employed workers are not able to gain access to important elements of the social security system, including sick pay and paternity pay, and for the government to tackle the potential pensions black hole because of lower personal pension savings among the self-employed.
“In so many ways, self-employment is characteristic of both the opportunities and the challenges faced by our society,” she will say. “It brings to the individual a combination of great freedom with great risk, an ability to build one’s own enterprise or to work flexibly around other priorities; it can offer great prosperity for some, but poverty pay for others.”
