News from Andrew Dismore (past staff): Stagnated wages could leave working London households £3,000 worse off

Stagnated wages could leave average working London household £3,000 worse off

Pay in London is failing to keep pace with inflation increases, analysis of new data shows. Recently released Office for National Statistics (ONS) data shows that average household incomes from wages and salaries in the capital reached £36,735 last year. However, this figure is lagging behind what the Bank of England’s inflation calculator suggests the average Londoner should be taking home.

Between 2010/2011 and 2016/2017, the average London household income generated from wages and salaries increased from £32,598 to £36,735.

However, according to the Bank of England’s inflation calculator, to keep up with rates, the average London household income from wages and salaries should have risen to £39,735 by 2017. This could mark a deficit of £3,000 in the amount that London households should have been taking home.

To tackle the stagnation of wage growth amongst low earners, the Mayor of London has promoted an increased London Living Wage, currently £10.20 per hour. 1,503 London employers are now accredited to the scheme which is set to rise each year in line with living costs.

However, a lack of affordable homes and rising rents in the capital are also putting pressure on the pockets of Londoners. The Mayor of London has secured more than £4.8 billion from the Government to help start building at least 116,000 genuinely affordable homes by March 2022. Yet recent statistics, published by Homes England, reveal that the number of affordable and socially rented properties built nationally by the Government in 2017/2018 dropped by 22%, compared to the previous year.

The uncertainty surrounding Brexit is expected to add to the strain. Ex-Chairman of the City of London Corporation, Sir Mark Boleat, recently projected the loss of 75,000 jobs in the capital’s financial sector and up to £10 billion in annual tax revenue when the UK leaves the European Union. Last week, Airbus added to the mounting pressure on the Government, after it confirmed it is considering cutting thousands of jobs over concerns about the potential for a hard Brexit.

Labour’s London Assembly Spokesperson for the Economy, Andrew Dismore AM, said:

“We’ve had eight years of the Government trying to feed us this gross inaccuracy that austerity will leave us all better off, and clearly the opposite is true. With wages unable to keep pace with the ever-increasing cost of living, Londoners’ pockets are taking the hit.

“The Government shamelessly hide behind employment figures that, on closer inspection, reveal an increase in zero-hour contracts and precarious gig economy jobs. Meanwhile, even those in stable employment are buckling under the pressure of sky high rents and rising food prices.

“The strain under which ordinary people are placed is being compacted by the Government’s dire handling of Brexit negotiations. It’s becoming increasingly clear that Londoners and businesses alike lack faith in the Government’s ability to protect their interests.

“It is baffling that the Government insist on presiding over policies that have led to this decline in living standards. They should act now to abandon their failed programme of austerity, properly invest in public services and local authorities, and stop the country hurtling towards a hard Brexit in which we all miss out.”

ENDS