Is pay going up?

 

The government is promising to publish figures within days to show that the vast majority of workers have seen an increase in their real take home pay in the past year.

The data will, officials claim, show that the wages of 80% of workers - not the richest 20% - have increased faster than inflation after tax cuts are taken into account in the year to April 2013.

This follows a claim made by David Cameron at Prime Minister Questions today that "this year people are better off because we have controlled spending and cut taxes".

It seemed to contradict the widespread assertion that most of us are getting poorer even as the country is starting to get richer again, as wage rises are still lagging price increases.

It would also challenge Ed Miliband's claim today that for most people "life is getting harder" and Labour's oft repeated insistence that there is a cost of living crisis.

The government was today unable to provide the statistical basis for the Prime Minister's claim, although I understand that it will include the impact of recent tax cuts (due to the increase in the personal allowance - the amount you can earn before paying income tax) - but, critically, not cuts in benefits eg the freezing of child benefit , real terms cuts in tax credits and council tax benefit cuts.

The statistics are sure to be closely scrutinised, given that ministers have in the past used data to claim an increase in living standards which official forecasters and independent statisticians said was unhelpful or misleading.

Labour will continue to point to data produced by the independent Institute of Fiscal Studies which shows that after taking into account inflation, tax and benefit changes the average family is hundreds of pounds a year worse off than they were at the time of the last election.

This latest attempt by ministers to change the political terms of trade comes on a day when they were able to hail unequivocally good news about a fall in all types of unemployment and a record rise in the number of people in jobs. Next week sees the publication of the latest figures for economic growth which are likely to be another sign of the strength of the economic recovery. The Prime Minister is tonight at the Davos summit of international political and business leaders. He will be speaking there about the economy on Friday.

Notes for nerds

The government is basing its analysis on the last Annual Survey of Household Expenditure produced by the Office for National Statistics just before Christmas. It is based on data for the year up to April 2013.

 
Nick Robinson, Political editor Article written by Nick Robinson Nick Robinson Political editor

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  • rate this
    0

    Comment number 55.

    53.alan
    And even more pensioners have not, Alan. Your inflation indexed pensions must be linked at least to RPI rather than CPI, one imagines. As for your savings, they presumably are not held in any form of bank account. Not every pensioner is fortunate enough to be able to risk investing their savings in the markets.

  • rate this
    -2

    Comment number 54.

    Keep the lies going. BBC

  • rate this
    +3

    Comment number 53.

    Like many pensioners, my income has increased in real terms.
    As a pensioner in the 40% tax bracket I haven't gained from the raising of the 10% tax threshold.
    But my pensions have held their value as they are index-linked.
    My investments and savings however are up about 12% in 2013.
    The only downside is the Winter Fuel Allowance which I now have to share with my wife since she became 65.
    Alan

  • rate this
    +2

    Comment number 52.

    If average real disposable earnings have increased between April 2012 and April 2013 for all quartiles except the top one, then we need to know about it.
    If that is true, then the political debate has changed dramatically.
    Balls will be hung by his own petard.
    Alan

  • rate this
    0

    Comment number 51.

    John_Bull @50
    Thanks
    All truncate & exaggerate in 400ch

    Apologies if I 'exaggerate' significance of 'low base', but even if 'negligible', not the only factor in recent growth: £billions in PPI compensation have been mentioned as significant, as have the government's push in the housing market & pick-up in global markets

    We all wish recovery, but should avoid wishful thinking about past & future

 

Comments 5 of 55

 

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