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When is a Living wage not a Living wage?

Budgets have always tended to involve smoke and mirrors. It’s the Chancellor’s annual sales pitch and like any sales pitch it’s only when you’ve read through the detail you really know what you’ve been sold. 

Councils will be relieved that there don’t appear to be any further in-year cuts although many policies may well cost local authorities a great deal, quite how much we will only find out over coming months. 

The Budget headlines focused on the claim that the UK will have a ‘Living Wage’ of £9 by 2020. I’ve been a supporter of the Living Wage from the beginning, I co-sponsored the motion which led to Crawley Borough Council becoming an accredited Living Wage employer and I see any step towards a Living Wage to be a good thing. But let’s be clear: this is not a Living Wage. 

The Low Pay Commission, which independently assesses what at level to set the Living Wage, has played no role in establishing the figure, it appears to have been plucked out of thin air. More importantly, due to other measures proposed in the Budget, we already know that by 2020 £9 will mean less money in the pockets of the low paid than the current Living Wage. 

It’s interesting that many in the business community who objected to Labour’s plans to increase the minimum wage before the General Election are now silent over Tory plans. Indeed, there are a wide range of policies the Tories appear to have taken straight from Labour’s manifesto, having claimed only a couple of months ago that such measures would undermine the UK’s economy. 

However, the big issue with this Budget is what is happening to tax credits. Simply put, millions of working families are going to be left hundreds, if not thousands, of pounds worse off, even with a £9 minimum wage. Budgets aren’t made up on the hoof, so it’s hard to believe that when David Cameron said just days before the General Election “I’m not going to cut your tax credits,” he didn’t know that was exactly what was going to happen. 

Cllr Peter Lamb

Leader, Crawley Borough Council

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