Monday, 28 March 2011

Britons £1,000 poorer

From today's Morning Star by John Millington

Workers in Britain are more than £1,000 worse off than two years ago because of pay freezes and inflation, according to research by the BBC.

The study found that average annual salaries after tax are £20,419, higher than in 2008 but far lower than 2004 rates once the impact of price rises was factored in.

Construction sector workers have been hit particularly hard with the value of their take-home pay falling by £1,188 a month in real terms since 2009.

The Panorama programme, aired this evening, found that the squeeze in people's living standards has been made worse by workers being too afraid of losing their job to ask for a pay rise.

Even homeowners are suffering with an estimated 659,000 households struggling with their mortgage payments while around 117,000 people are in arrears.

It is thought that a further 36,000 households would struggle if interest rates were to rise by 1 per cent to 1.5 per cent, while 179,000 people would have trouble keeping up with repayments if rates returned to their pre-credit crunch level of 5 per cent, plunging an additional 17,000 people into arrears.

Economic analysts Leap co-ordinator Andrew Fisher warned following the release of the figures that pay freezes and rising joblessness because of Tory cuts were making the chance of recovery "impossible."

"The only comparable situations are the Friedmanite experiment in cuts and privatisation unleashed in Chile under Pinochet and Ireland's brutal austerity from 2008 - both with disastrous consequences for people's living standards."

And Communist Party of Britain general secretary Rob Griffiths said that the real situation was much worse than the BBC research suggested.

"A working-class cost-of-living index would show inflation running at 12 per cent a year instead of the current RPI level of 5.5 per cent," he said.

"Food, domestic fuel and public transport and housing costs have been rocketing for many millions of workers and their families, which underlines the need for price controls as well as a substantial increase in pensions wages and benefits."

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