Average earnings are set to be £858 a year lower than previously thought by 2022 as workers “bear the brunt” of the Government’s economic mismanagement, Jeremy Corbyn said as he vowed Labour would end a “rigged” system.
The Labour leader said Philip Hammond’s Budget had let down millions of people who have “suffered from seven years of austerity, falling wages and declining living standards”.
According to Labour analysis of Office for Budget Responsibility (OBR) forecasts, the average worker is set to be £2,257 worse off by 2022 as a result of slower earnings growth.
Labour also highlighted problems with the Government’s tax-free childcare policy identified by the OBR, which revealed that 415,000 people had been expected to claim the allowance but only 30,000 did so and the full roll-out has been delayed another year.
Opposition politicians have been taking part in what Labour claimed was its biggest ever campaign day outside of a general election after the Budget, with Mr Corbyn addressing activists in Plymouth.
The Labour leader said: “Wednesday’s Budget let down millions of people across our country, who have suffered from seven years of austerity, falling wages and declining living standards.
“Labour will put an end to the rigged system, which has seen the super-rich doing just fine while the rest of us have seen our NHS and other vital public services that care for us cut to the bone.
“The next Labour government will invest in infrastructure, new technologies and our people in every region and nation to build an economy that works for the many, not the few.”
The OBR downgraded forecasts for growth in average earnings every year from 2017-18 to 2021-22 in its analysis published as Mr Hammond delivered his tax and spending plans.
Labour’s analysis compared the forecasts from March with the updated version published on Wednesday and found that average earnings in 2021-22 are expected to be £30,004 rather than the £30,862 implied by the earlier figures.
Across the five-year period, the cumulative effect of the lower forecast earnings amounts to £2,257.
The OBR document also revealed that just £37 million is set to be spent on tax-free childcare in 2017-18, a fraction of the £800 million originally envisaged in 2014.
Shadow minister for early years Tracy Brabin said: “This is a stunning admission hidden in the detail of the Budget papers. The OBR has exposed the disastrous failure of this flagship Tory policy.
“They have missed their targets by as much as 90% as the Government have once again failed to give families the support they need.
“Despite under-spending on childcare by nearly £1 billion, the Chancellor failed to address the growing crisis in early years, despite pleas from providers across the country. He talks about a Budget that makes our country fit for the future while failing to invest in a generation of our children.
“The next Labour government will give early years education and childcare the funding they need, as we make the 30 hours genuinely free and universal to all two to four-year-olds, while ensuring all parents can meet the cost of childcare.”