Labour
analysis, using House of Common’s Library endorsed modelling, shows that:

Average real earnings are set to
fall by £1,200 as a result of rising inflation and lower wage growth

At the
Budget last month we saw inflation forecast up this year and average earnings
forecasts lowered next year and for the next two years.

The
combination of higher prices and lower wages is that living standards are set
to be squeezed.

This time
last year, at the Budget 2016, the OBR was forecasting real average earnings
growth of 9 per cent between 2015 and 2020 (average earnings adjusted for CPI
inflation). However, at this year’s Budget, this was revised down to growth of
5 per cent between 2015 and 2020.

Converting
this to income values, Budget 2016 was forecasting that real average earnings
would be almost £2,500 higher in 2020 than in 2015. However, at Budget 2017
this was revised down to £1,300. This is a difference of £1,200.

Today’s
analysis comes on the back of IFS analysis last year which showed that the
“outlook for living standards has deteriorated rather sharply”, describing the
prospects for real earnings growth as “dreadful”.

The
Resolution Foundation has also said that the “outlook for living
standards in 21^st century Britain does not look promising” and that
“weak and regressive nature of income growth in the years ahead should concern
us all”. 

This analysis looks at the effect on living standards
resulting from changes to OBR forecasts at this year’s Budget.

Tax and benefit changes, as well as previous OBR
forecasts will impact on living standards; however, this analysis focuses just
on inflation and earnings outlook.

John
McDonnell MP, Labour’s Shadow Chancellor, commenting, said:

“Today’s analysis shows the impact of seven years of
Tory economic failure.

“Living standards are being squeezed and working
people are being hit hard. This is despite the Tories promising at the last
General Election that they would raise living standards.

“The truth is that Theresa May has failed working
people and the Tories are taking the country backwards. Labour would make
different choices and stand up for ordinary
working families.

“Only Labour will take the action needed to end the Tories’
economic failure by introducing a Real Living Wage of £10 an hour by 2020 and
by investing in our
regions and our local communities.”

Angela Rayner MP, Labour’s Shadow Education Secretary, responding to a
Teach First report that claims the country’s poorest parents have half the
chance of getting their child into an outstanding primary school, compared to
the richest ones, said:

“This
is just the latest evidence that the Government’s rhetoric on social mobility
has not been matched by results. 

"Theresa May’s only answer to the social mobility crisis is her
discredited policy of new grammar schools, which by definition ignores the
crucial early years of a child’s life and does nothing to ensure all children
go to a good primary school.

“It is clear that the Tories do not have the answers to the serious issues
facing our schools, such as the crisis in recruitment and retention, super-size
classes, and the unprecedented squeeze in school budgets.”

Employees in small businesses earned less than previously
thought between 2010 and 2015

 Analysis of government figures shows:

·        
Methodological revisions to the Average Weekly Earnings of
employees in small businesses shows a downgrade in level of earnings between
2010 and 2015

·        
The Government’s mishandling of the economy and mistreatment of
small businesses has resulted in pay for employees being less than thought

·        
Between 2010 and 2015, the average revision downwards in the
level of weekly earnings was 1.7 percent. This amounts to more than £2,000 over
that period less than previously thought,.

Rebecca Long-Bailey MP, Labour’s Shadow Secretary for Business,
Energy and Industrial Strategy, said:

“The latest revision to the
methodology for calculating earnings for employees in small businesses shows
that the level of earnings was less than previously thought during the period
2010 to 2015.

“Added up, between July 2010 to
December 2015, earnings for the average employee in a small business were in
fact over £2,000 less than previously thought.  This is a further
indictment of the Conservative’s already terrible record of protecting the
living standards of people in this country and their failure to recognise the
experiences and requirements of small businesses.”

John McDonnell MP, Labour’s Shadow
Chancellor, has today written to the Chancellor, Philip Hammond MP, to demand
the opening of a public inquiry into the scandal of Libor interest-rate
rigging.

Interest rate rigging could have
cost the public billions and public bodies affected are due compensation

New
evidence uncovered by the BBC Panorama programme points to collusion between
senior figures at the Bank of England and major banks to rig the critical
“Libor” interest rate that trillions of pounds of financial products depend on.

And
court transcripts, shown below, from the recent trial of bank staff accused of
rigging Libor also show that the rigging of this crucial interest rate was
known to regulators and Bank of England staff at least as far back as August
2005.

But
with small businesses and public bodies dependent on loans and more complex
financial products linked to the value of Libor, efforts to rig the interest
rate could have cost the public billions. Schools, NHS hospitals and local
authorities are all amongst those likely to be affected, particularly where
they had been sold more complex Libor-linked financial derivatives.

The
Shadow Chancellor is asking for an immediate public inquiry into the rigging to
establish who took the decision to apply this pressure, who was involved in its
implementation, who was aware that this was taking place, and whether any
impact assessment was undertaken at any point.

This
is essential in establishing the scale of compensation due to public bodies
from banks engaged in Libor rigging.

John
McDonnell MP, Labour’s Shadow Chancellor, said:

“The
revelations this week of the possible pressure being applied by senior public
officials on banks to rig one of the world’s most important financial metrics
demand an immediate response from this government. Continuing official silence
from the Chancellor is not acceptable when confronted with this scale of
rigging.

“It
is essential that we clarify who took the decisions to rig the Libor index, and
when, so that the schools, NHS hospitals and local councils that lost out can
be paid the compensation that is rightfully due and public confidence in our
banking system and official institutions can be restored.”

Jeremy Corbyn, speaking on Easter Sunday, said:

“I would like to wish everyone a happy Easter this weekend.

"As millions mark Easter around the world, it’s a time to reflect on the challenges we face both at home and internationally – and what our response should be.

"We hear painful stories every day, of homelessness, poverty or crisis in our health service – or across the world, of the devastating consequences of war and conflict, including millions forced to become refugees.

"It would be easy to retreat into our private lives because the challenges seem overwhelming, or allow ourselves to be divided and blame others.

"But we need to respond to these problems head on, through action and support for social justice, peace and reconciliation.

"Those principles are at the heart of Christianity. And Christians throughout the world will this weekend be remembering Jesus’s example of love and sacrifice, and the Easter message of redemption and peace.

"At a time of growing conflict, that message of peace could not have more urgency throughout the world.

"I meet Christians, and others of all faiths and none on a daily basis, who share and live those ideals: people who give their time for others, to run food banks, protect the vulnerable, look after the sick, the elderly and our young people.

"That spirit of respect for each other, peace and equality is one we can all share. So to all Christians and those of all faiths and none, have a happy and peaceful Easter.”