ACCORDING TO the Office of National Statistics, the value of the average pay cheque fell by 1.3% in the year up to April. Years of slower growth took some money off some workers and destroyed the jobs of others.
The relentless attack of big business on wages was another factor in this fall – low pay rises in the private sector mean that private sector workers’ average pay had gone down by 1.9%.
But one major reason why workers’ pay has been declining was that National Insurance (NI) contributions were increased by £8 billion in April. Brown’s raising of National Insurance – a regressive form of taxation which is capped on earnings above £600 a week, making sure the rich pay less – is a typical New Labour policy.
Labour run a grossly unequal tax system, which hits the poorest hardest. Now the richest 20% of households pay a total tax bill of only 34.2% of their incomes while the lowest-income groups stump up 41.7% in tax.
Now it’s hitting real incomes hard.
