The Labour Party: One Step Closer to Lessening Economic Inequality?
'Over 4 million people in the UK were earning below the living wage in 2023, with many unable to cope with the cost of living and inflation'
by Tayyaba Taimur, Law LLB 09/12/2024
The national minimum wage is set to increase to £12.21 per hour next year compared to the current rate of £11.44-But what does this actually mean? After having won the general election earlier this year in July, commitment to increasing the national minimum wage was announced during the annual conference in September 2024.However, at a time where the cost of living has risen rapidly and inflation has remained high-this year being at 7%, which although lower than the 10.1% in 2022, is still higher than the Bank of England’s target of 2%.Therefore,it is unlikely that the burdens of the ongoing energy crisis will be lessened, although it will be constrained. For many, this increase in the national minimum wage will mean a greater degree of freedom in spending. Yet, simultaneously financial freedom will not be guaranteed ,especially given the recent price cap increase by Ofgem, a tension that is further aggravated by a backwards decision by Labour to withdraw winter fuel payment for many pensioners. It could be suggested, then, that there is a conflict between the stated intentions of the Labour party, which is, according to their election manifesto, ‘tackling poverty and inequality’, and the actual material impact of their welfare policies.
Although it is true that increasing the national minimum wage next year will lessen economic inequality by consumption and redistributing income, the Labour party must ensure its actions do not lead to unintended consequences- such as inflationary pressures,that could erode the benefits for workers.
