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 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

  • rate this
    +2

    Comment number 50.

    #49

    Okay, I exaggerated about BALLS, a bit

    But, YOU are still postulating. Had Balls been in power, domestic demand may have been higher, but its negligible, and the Euro crisis headwinds would still have affected output.

    What wouldn't have happened though is a rebalancing between public & private. The economy will grow faster in future because that did happen, & I did say so at the time

  • rate this
    0

    Comment number 49.

    John_Bull @47
    "postulating
    vehemently"

    Vehemence in postulation has passed into assertion of 'unknowable' fact, & actual misrepresentation of 'Ed Balls' - standing for his party - who (I believe) has said no more than that 'cutting too far too fast' would de-rail recovery (NOT that we would NEVER find orders picking up, from own efforts & global recovery, arguably DESPITE demand destabilisation)

  • rate this
    -3

    Comment number 48.

    He had to do this. His claim in PMQ's was leaving him open to ridicule and being "out of touch". Did Labour think he would let it go on to the election?

    Is he planning to tell people that poverty is just in their head? Or is it to convince those who would have voted against him out of a social conscience?

  • rate this
    +4

    Comment number 47.

    #45
    Your point about lower base is weak - the difference would be negligible as a %age. But even then you're basing that on a supposition - that there would have been more growth. You cannot argue that empirically, since no one can know, as such you're postulating.

    And, that's Labour's problem - They vehemently asserted that GO was wrong, but now he appears right.

    Balls cornered himself.

  • rate this
    0

    Comment number 46.

    @35Grounder
    Yeah, whatever ...
    ... you wish.

    What I have demonstrated is that 'pay' can mean different things in different situations: from your 'real' adjusted but based on an average to the pay of unskilled part-time worker earning below the PA in 2009 without an increase in 4 years.

  • rate this
    0

    Comment number 45.

    John_Bull@43
    "key point"
    My point on misrepresentation, for which you make no apology?

    Perhaps you are seeking to re-state an 'argument', but it appears to be no more than an indulgence of "Balls was wrong"

    You do realise that the same activity from a lower base 'earns' a higher percentage 'growth rate'? The tragedy of Greece is akin to that of our regions, writ large. Equal partnership the need

  • rate this
    0

    Comment number 44.

    Eventually it has to.There's only one way that is proven to work to get economy out of recession and that is a major increase in the money supply.It must start with the US.Deflating the value of currency allows old expensive debt to be paid back with cheap dollars, credit to increase.Prices rise and demands for higher pay rise too.The artificially high value of the USD is bankrupting the world.

  • rate this
    +3

    Comment number 43.

    #38.All for All

    "Left Wing Revisionism"

    The key point is that growth is faster here than any other developed nation - because the correct policies were applied. Those policies were not correct for Greece because it does not have control over its Currency. Greece needs to leave the Euro.

    If BALLS had is way there would have been no rebalancing & slower growth now

    BALLS was wrong

  • rate this
    +1

    Comment number 42.

    Perhaps if Red ED millidpe and Stand up Comedian Balls and the elusive Mr Brwon had not bankrupt the UK. then we would not e in this mess , what short memories many of you have like goldfish

  • rate this
    +2

    Comment number 41.

    Statistics, statistics. Here's mine. Solitary 1% payrise in total during term of this coalition. Review of my pay and conditions meant my allowances have been cut by around 10%. Delivered on all Governments target. Have to pay more into my pension, for longer and get less out. That's my statistic.

  • rate this
    0

    Comment number 40.

    @39 Realist "Ed M's calculation"

    See http://fullfact.org/factchecks/tax_bombshell_autumn_statement-29293

    Note that it is a difference in "real gross pay" and relies on the (officially sub-standard) RPI measure of inflation. Using RPIJ inflation reduces the difference to £1,010 whereas CPI reduces it to £1,150, according to the article (my calculations differ slightly).

  • rate this
    +1

    Comment number 39.

    Can anyone say they have seen Ed M's calculation of the £1600 he asserts people have lost since 2010 and did so again yesterday at PMQs. Isn't there a saying about sauce ,goose and gander.

  • rate this
    -1

    Comment number 38.

    John_Bull @6
    "as BALLS insisted"

    Sorry to say, even of by mistake, you misrepresent

    Not just Ed Balls but very many commentators (and the LibDems) knew the danger of electioneering austerity lay in collapse of the recovery underway in 2010, not as you imply collapse of 'the economy'. That said, the worlds of many have collapsed, here and even more in Southern Europe, thanks to this Tory scam.

  • rate this
    +2

    Comment number 37.

    Hogwash!

    "The government was today unable to provide the statistical basis for the Prime Minister's claim"

    Even the government themselves can't back up these claims.

  • rate this
    +4

    Comment number 36.

    @32 Up2snuff

    You can distinguish gross pay and net pay but "gross take home pay" is meaningless.

    I await the figures with interest. Neither median nor mean have any particular relevance to "most workers"; we need to know how many individual workers have taken home an increase greater than the increase in prices. This is almost certainly less than 80% and probably less than 50%.

 

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