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Sadiq Khan is under pressure today to defend plans to increase his share of council tax by the largest amount since he took office. The Mayor says that the rise, registering at nearly £32 a year at band D, is to raise extra funds for crisis-hit Transport for London. Residents will understandably see it as a further hit to their disposable income.
As far as the capital’s recovery is going, it is not all doom and gloom. The latest data indicates that investor spending in London office space returned to pre-pandemic levels in 2021, while on some shopping days last year activity surpassed that of 2019.
Yet the longer-term challenge facing households in 2022 — beyond getting hold of a lateral flow test — will be the cost of living. Khan’s tax rise does not exist in isolation. Londoners are already facing spiralling energy prices, a National Insurance rise and inflationary pressure across the board. Meanwhile, wages are not increasing to catch up.
Indeed the Resolution Foundation think tank reports that 2022 is set to be the “year of the squeeze” as take-home pay stagnates and families face a £1,200 hit from April. It is far from clear that the Government, after a crisis-ridden few months and exhausted by Covid, has a plan to combat rising prices and prevent falling living standards.