Employees in Luton among the lowest paid in the East of England

It comes as Chancellor Rachel Reeves unveiled her first Budget this week, in which she raised taxes to a historic level, sent borrowing soaring, and increased spending to boost growth and repair public services.

Ms Reeves vowed to "protect workers", and did not raise national insurance, VAT or income tax for employees.

The latest figures from the Office for National Statistics show full-time employees in Luton earned £33,202 annually as of April – a 1.5 per cent rise on the year before.

It means people in the area earned among the least in the East of England, where the average wage was £39,065.

Across Great Britain, the average full-time worker earned £37,521, meaning Luton employees earned less than the average across the country.

The figures come as Ms Reeves admitted the Budget may result in workers seeing smaller pay rises.

While there were no direct tax rises on employees, the first female Chancellor admitted a rise in employers' national insurance could be passed on to workers.

National insurance contributions from employers will rise from 13.8 per cent to 15 per cent in April, while the threshold will drop from £9,100 annually to £5,000.

The tax rise is expected to be around £25 billion per year, but experts have warned much of this will be passed onto working people.

The Office for Budget Responsibility forecasts 76 per cent of the increase will be passed on by 2026-27 through lower real wages – a combination of a squeeze on pay rises and increased prices.

The watchdog also warned the measure could lead to the equivalent of around 50,000 average-hour jobs being lost.

Asked about the consequences of the move, the Chancellor told the BBC: "I said that it will have consequences.

"It will mean that businesses will have to absorb some of this through profits, and it is likely to mean that wage increases might be slightly less than they otherwise would have been."

James Smith, research director at the Resolution Foundation economic think tank, said: "This is definitely a tax on working people, let’s be very clear about that.

"Even if it doesn’t show up in pay packets from day one, it will eventually feed through to lower wages."

Shadow Treasury chief secretary Laura Trott said the Budget will hit workers' pay.

She added: "This follows from the OBR saying household income will fall by 1.25 per cent, and inflation will be pushed up because of the decisions in Labour’s Budget.

"This is the Budget Labour planned all along but was not honest about at the election. And it’s no wonder, the effects of it are far worse than even we predicted during the campaign."