This week I spoke to Karen, a local charity worker who works in the care sector. She had just been given the “good” news that she was to receive a 1% pay increase, following the completion of national pay negotiations. This will be, she told me, her first pay increase since 2009. On a salary of just over £22,000, this increase amounts to an extra £220 a year. After tax, that’s around an extra £4 a week.
This winter, energy companies have announced an average increase in bills of over 9%. This is on top of average annual energy bill inflation of 2.2% every year since Karen’s last pay increase.
Karen’s situation – just one pay increase of 1% in four year – while utilities bills, food, and transport costs spiral, perfectly illustrates the cost of living crisis this country faces.
I’ve already spoken to many hard-working families in South Dorset and they’ve told me how they’re all struggling at the moment and that things are getting harder not easier for them. Which is why in this week’s article, I’m asking you to get in contact with me. I want to find out how you have been affected by the cost of living crisis.
As Karen’s case shows, wages have gone up slower than prices for 39 out of 40 of the months David Cameron has been Prime Minister and year after year people are working harder, for longer, for less. Shockingly, we’ve now reached the point where more of the people bringing up families in poverty are in work than out of work.
We need to make sure work always pays which is why the next Labour government will introduce Make Work Pay contracts that will help businesses raise wages for millions of low-paid workers, and cut social security bills for the taxpayer.
Firms that sign up to paying their employees the living wage, currently £7.65 in areas like Dorset, in the first year of the next Parliament will be offered a 12 month tax rebate of up to £1,000 for each individual worker that they move onto a living wage.
The money would be fully funded from increased income tax and National Insurance revenues. We would also make additional savings through lower tax credits and benefit payments that will cut social security bills and help pay down the deficit in the future.
Make Work Pay contracts will benefit employees, businesses and the British taxpayer. Low-paid workers will be paid more, firms will receive a tax rebate and will benefit from higher staff morale, increased productivity and lower turnover of staff; and the taxpayer will see a reduced social security bill from lower spending on tax credits and benefits for people in low paid work.
I really believe this could make a real difference to local working people on low wages that need help dealing with the cost of living crisis. But I want to know what you think. If you’ve been affected by the cost of living crisis, or are employed on low pay, then I want to know if you think Labour’s plans will make a difference. Please contact me through my website here or email me at [email protected] so I can take the fight to the Tories on this pressing issue, and together, we can fight the cost of living crisis.
Simon Bowkett is the South Dorset Labour Prospective Parliamentary Candidate. Follow his campaign at www.simonbowkett.co.uk, and on Twitter @Simon_Bowkett
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