Tuesday, December 7, 2021
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UK Raises Its Minimum Wage By 6.6%

With inflation runaway in the United Kingdom, the Government leaked this Monday that it will raise the minimum wage by 6.6%, up to 1,520 pounds a month (1,800 euros), accepting the recommendations of the Low Wage Commission, an advisory organization of the Government . However, the criticism has not been long in coming, because much of that increase will go to taxes and cuts in other income.

From the outset, Boris Johnson’s Cabinet has raised the country’s tax pressure to the highest since the ‘Thatcher Era’ , with a 1.25% rise in contributions as its star measure to increase income for the health system. As the Liberal Democratic Party denounces, the result would be that 44% of the increase – about 48.4 euros of 100 extras – “will go into taxes before even reaching the bank accounts of the workers.” “This measure is just more nonsense from a government more interested in passing unfair tax increases and breaking promises than protecting the vulnerable,” Liberals Chairman Mike Dixon said.

For its part, the Institute of Fiscal Studies pointed out that this increase will be limited to about 250 pounds per year for full-time workers who complement their meager wages with the Minimum Income, since they will suffer a cut of about a thousand pounds per year in this concept . Given that 37% of the recipients of this subsidy are working, some 2,160,000 people between England, Wales and Scotland, the effect of this increase will be rather limited precisely for the most needy people: those who, due to the cost of living in the areas where they live or because of their family situation they need more than the minimum wage to survive.

The Labor Party has demanded the rise to 1,600 pounds (1,900 euros) and the recovery of the thousand pounds per year cut to the Minimum Income, in addition to a VAT cut on electricity bills – even more exorbitant than in the rest of Europe, if possible – for six months for the neediest families. Pollster YouGov conducted a poll before the announcement that half of British people consider the figure of 1,600 pounds the most suitable for the minimum wage, with 1,760 (2,090 euros) the second most supported by the population.

Finance Minister Rishi Sunak will present the budget on Wednesday, which is expected to include some £ 31 billion in new public spending. Almost 6,000 million will go to the health system, 1,500 to public transport, more than 6,000 to education, both for young people and adults, and 2,000 million to construction of new homes on barren land with no other use.

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