There is not enough time for the Tories to make good on their promise to create a ‘high-skill, high-wage’ economy
“Levelling up” is a political slogan with its own department, recognition for the role it played in winning the Conservatives the 2019 election. Tackling the blight of regional inequality was dubbed as the Tories’ “defining mission”. But data released this week shows successive Conservative prime ministers have failed that task in one key way. The Institute for Fiscal Studies finds a widening geographical wage gap in the last three years – driven by income increases for well-paid workers in London which mask real wage cuts elsewhere.
Mean wages for employees living in the capital had increased by 5%, after adjusting for inflation, to £4,400 a month before tax. This is almost double the average national increase of 2.7%. Those living in London’s commuter belt saw pay increases of 4.5%. But many workers were now between 1% and 4% worse off than they were before Covid-19 arrived. Ministers have chosen year after year to set the price of labour in education and public administration at levels that ensure workers suffer real pay cuts. The jobs market is not just about demand and supply. Labour shortages have been most acute in low-paid sectors. Health and social care settings are struggling to fill roles. But real pay growth there is just 2.5% – below the UK average rise. Industrial action continues because workers find themselves unable to bargain for better pay.
