Nine million more struggle to pay bills

by Luke James

Austerity-Addicted Chancellor George Osborne has left nine million more people in financial difficulty compared with seven years ago, Money Advice Service revealed today.

The independent body found that 26 million people across Britain are now living on the brink of financial ruin - a massive 35 per cent rise since their last survey in 2006.

Failing Tory economic policies have sent hourly income plumetting by 6 per cent and sparked a "live for now" attitude to cash among the population.

For example, more than one in five of the 5,000 people surveyed would rather have £200 immediately than £400 in four months' times.

A Treasury spokesman claimed the government had helped households meet the rising cost of living by raising the personal tax allowance and freezing fuel duty.

He said: "We recognise that times are still tough for families, but Britain is holding its nerve, we are sticking to our plan and the British economy is on the mend."

But Labour shadow Treasury minister Catherine McKinnell said the figures bust George Osborne's "out of touch claims that people are better off."

She said: "This government's failed economic policies mean prices are rising much faster than wages. And their unfair choices have seen hard-working people hit hard while millionaires get a huge tax cut."

Ms McKinnell said Labour would help families "with a lower 10p starting rate of tax, paid for by a mansion tax, and take action to tackle soaring rail fares and energy prices."

TUC general secretary Frances O'Grady added that only "strong growth underpinned by decent jobs and higher pay" would end the "longest real wage squeeze since Victorian Times."

Separate figures showed there had been a 3 per cent rise in the number of people being force to declare themselves bankrupt over the last three months.

And the Left Economic Advisory Panel's Andrew Fisher warned: "As personal debt starts rising again it is clear that the squeeze on living standards also creates a huge economic risk if loan and mortgage defaults rise, threatening the banking sector again."

This article first appeared in the Morning Star

Price rises pile pain on struggling workers

Will Stone

Workers struggling with wage freezes and below-inflation rises were hit by higher prices for basics last month - and worse is set to come, the Office for National Statistics said.

The consumer prices index rise 0.3 points to 2.7 per cent in May.

Officials predict it will top 3 per cent over the summer.

But average earnings increased just 1.3 per cent in the year to April, meaning millions of workers have had a real-terms pay cut.

The retail price index, which includes housing costs, rose 0.2 points to 3.1 per cent.

A 22 per cent rise in air fares, the fastest increase since records began in 2001, helped push up CPI.
Overall transport prices rose by 0.4 per cent between April and May, and the cost of clothing and footwear also rose 1.2 per cent.

Furniture, carpets and garden tools also became more expensive.

Politicians, unions and economists issued a stark warning that plummeting wages are dragging Britain downwards.

Shadow Treasury minister: Catherine McKinnell MP

TUC general secretary Frances O'Grady warned: "Forty consecutive months of real wage falls means people have less to spend on the high street," leaving the economy stuck in the gutter.

Shadow Treasury minister Catherine McKinnell said that "the cost-of-living crisis is deepening," noting that because of inflation and low pay people's spending power is now £1,300 a year less on average than when the coalition came to power.

Left Economics Advisory Panel co-ordinator Andrew Fisher said: "Today's rise in inflation exacerbates the squeeze on wages being felt by workers - sending ever more into poverty and reliance on food banks.

"To tackle low pay, we need stronger trade union rights, a significant rise in the minimum wage and a credible plan to create jobs."

He urged the Labour Party to ditch support for pay freezes for low-paid public-sector workers.

Soaring inflation is also hitting people with savings hard, with none of Britain's 820 standard accounts paying enough interest to outpace tax and inflation, according to Moneyfacts.co.uk.

This article first appeared in the Morning Star