1st Apr 2025 09:55
(Alliance News) - Keir Starmer acknowledged the cost-of-living crisis in the UK is ongoing and people were feeling the pressure of rising household bills as the government insisted it was taking action to give workers "more money in their pockets".
The UK prime minister insisted that the rising national living wage and the Bank of England's interest rate cuts were helping household finances despite the mounting costs.
The start of April sees council tax and energy bill hikes for millions of households.
Starmer told Sky News: "I think for most people, they would say the cost-of-living crisis is ongoing, and they feel the pressure financially.
"That's why it's so important we make good on our pledge that people would feel better off and the national living wage going up today by an average of GBP1,400 is going to affect millions of people, so in their pay packet this month, and obviously for months to come, they will now be getting more money.
"That's alongside the other work we've done – interest rates have been cut three times since we've had a Labour government, so anybody with a mortgage knows that the rates are coming down, and of course, on average, wages going up now more quickly than prices.
"I acknowledge that with bills coming in, people see that rise and that is a pressure. That is why it's so important we deliver on the national living wage, to make sure people are better off – GBP1,400, quite a significant amount of money for millions of workers."
Workers on the living wage aged 21 and over will get a 6.7% pay increase, from GBP11.44 to GBP12.21 per hour, while 18 to 20-year-olds will receive an uplift of GBP1.40, from GBP8.60 to GBP10 per hour.
However, the rise, announced in Chancellor Rachel Reeves' budget, coincides with increases to council tax, employer national insurance contributions, NICs, and fuel costs for millions of households across the country.
The annual bill for a household using a typical amount of gas and electricity is going up to GBP1,849 per year, an increase of GBP111, when Ofgem's latest energy price cap takes effect on Tuesday.
Water bills for households are also going up in England and Wales by GBP10 more per month on average, though it varies depending on the company.
Meanwhile, most councils in England will hike tax by the maximum amount allowed, which is 4.99%, and on April 6 the rate of employer NICs will increase from 13.8% to 15%.
Opposition critics have claimed families will be up to GBP3,536 worse off over the course of this Parliament as a result of what they call the government's "jobs tax".
But Deputy Prime Minister Angela Rayner, who is also overseeing Labour's plans to upgrade workers' rights, said: "This pay rise for over three million of the lowest-paid workers was a priority for this Government and means we're already giving hardworking people more money in their pockets, and a proper wage increase worth over twice the rate of inflation."
Unions welcomed the wage increase, with TUC General Secretary Paul Nowak saying it would "make a real difference" to the lowest-paid workers and set out a path to ending "the outdated and unfair youth rates".
"More money in working people's pockets means more spend on our high streets – that's good for workers and good for local economies," he said.
Businesses and political opponents have suggested the employer NICs increase would damage jobs, growth and investment.
Conservative leader Kemi Badenoch said the government's economic policy left Britain dangerously exposed to the fallout from global tariffs announced by US President Donald Trump.
She said: "Rachel Reeves has gambled with the economy, leaving us dangerously vulnerable to American tariffs. Labour's unprecedented borrowing spree and record levels of tax means she has pulled the handbrake on economic growth.
"The prime minister might think this is all just pocket money, but Britain's working families will certainly notice the GBP3,500 Labour ministers have cost them.
"Labour didn't have a plan and now they have snatched winter fuel payments from pensioners, introduced emergency welfare cuts and from this weekend will be hiking taxes on work through their jobs tax."
Liberal Democrat leader Ed Davey urged the government to reverse its decision to cut the winter fuel payment for all but the poorest pensioners as part of Reeves' efforts to balance the books.
He said: "Families are facing spiralling energy and water bills while company bosses rake in millions of pounds in bonuses. It's no wonder so many feel they're being ripped off.
"The government must get a grip on energy bills, and fast. That means reversing their callous decision to cut winter fuel payments and protecting families in fuel poverty from being hammered once again by unfair bill rises."
By David Hughes and Nina Lloyd
Press Association: Finance
source: PA
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