UK pay rising in real terms, says coalition

 

David Cameron: "I want to see people paid more"

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Most British workers have seen their take-home pay rise in real terms in the past year, the government claims.

It has produced figures showing all except the richest 10% saw their take-home wages rise by at least 2.5% once tax cuts were taken into account.

That is more than the Consumer Prices Index (CPI) inflation rate of 2.4% in the year to April 2013.

Labour leader Ed Miliband said the figures were "dodgy" and ministers were out of touch with people's lives.

Analysis

So did we all feel a little better off this morning?

The government is suggesting that the vast majority of us should.

There is a debate how the figures on rising wages add up. But this isn't simply a matter the statisticians - it's a battle for territory amongst the politicians.

Labour have made great play of a "cost of living crisis" - citing a fall, on average, in gross wages since 2010 of £1,600.

For a while, the government didn't have a dog in this fight - instead pinning its hopes of a political recovery on the economic recovery.

But now, teeth gnashing, they are getting on to Labour's ground in a sign that they won't concede any arguments before the general election.

The trouble is trading statistics doesn't in itself make people feel better off - and the IFS says, across the piece, average incomes are still likely to be lower in 2015 than 2010.

The coalition are hoping, though, that today's foray might just plant the suggestion that - to coin a phrase - things can only get better.

The government said the figures showed only the top 10% of earners fell behind the CPI rate - which excludes the costs of buying and owning a home such as mortgage interest repayments - with an average increase of 2%.

It said it made its claims by taking into account cuts to income tax and national insurance.

Conservative skills and enterprise minister Matthew Hancock said: "Of course, as a consequence of the great recession, people who work hard have been made poorer and times are tough for families as a result.

"That's why, as part of our long-term economic plan, we are cutting taxes for hardworking people so they have more money in their pockets and are more financially secure."

Speaking on Thursday, Prime Minister David Cameron said there were "some positive signs" on take-home pay but a sustained and broad-based recovery in people's finances would take time.

The Lib Dems said they had been the driving force behind tax cuts for the lowest-paid, which will see no-one pay tax on the first £10,000 of their income by 2015.

But Labour said the government's figures were based on weekly, not annual earnings and did not take account of benefits cuts.

Chart showing government figures on take-home pay

"This is a complete insult to millions of people who can see with own eyes and feel with own pay packets that they are getting worse off," Mr Miliband said.

"I think this is a government in a hole that has no answers to cost of living crisis."

Analysis

Is real-terms pay now rising?

As ever, the answer to this depends on which statistics you choose to look at.

Official ONS figures on pay show that annual pre-tax pay rose 2.1% in the year to April 2013.

Over the same period, inflation was 2.4%, so in that period pay was falling in real terms.

However, now we know that CPI inflation has fallen to 2%, it might be reasonable to assume we have reached the point at which pay is again growing in real terms.

But other statistics tell a different story.

According to the ONS, average weekly wages rose by just 0.9% between the autumn of 2012 and 2013. That is well below inflation.

Put another way, the average weekly wage, pre-tax, rose from £472 to £475 over the last year.

On figures like that, not many people will be feeling richer.

And in any case, inflation out-stripped pay in each of the last five years. So we have quite a bit of catching up to do.

"All they're producing is a set of dodgy statistics, data that doesn't add up, to try and tell people what they can see with their own experiences, with their own lives just isn't true."

Paul Johnson, director of the Institute for Fiscal Studies, told BBC Radio 4's Today programme the government had used "a perfectly sensible set of numbers" to calculate take-home pay for the 2012-2013 period.

But he pointed out that more up-to-date Office for National Statistics data - the average weekly earnings index - showed wages rose "quite a lot less quickly than inflation in the most recent months".

He added that the IFS's own analysis suggested that "if the recovery takes off and continues as expected, people will start to see their incomes rising by 2015... but they will be well below where they were six or seven years ago".

Labour's assertion that real annual wages have fallen by £1,600, on average, since 2010 also only gave a "partial picture", the IFS added.

TUC General Secretary Frances O'Grady said the government's figures should be taken "with several tons of salt" as they did not include the effects of tax credits and benefits, particularly the freeze in child benefits.

Earlier this week, the International Monetary Fund upgraded its forecast for the UK economy, the latest in a series of positive economic indicators.

It now expects the economy to grow 2.4% this year - faster than any other major European economy - against its previous forecast of 1.9%.

Chart comparing earnings and inflation
 

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  • rate this
    +1

    Comment number 835.

    Civil Service. Pay increase stuck at 1% for several years now, except for those at the very top. 'Nuff said.

  • rate this
    +2

    Comment number 834.

    If, as people claim on this forum the Tories are lying, why aren't opposition parties actually hawling them up on it?

    So either they aren't lying, or Labour is full of idiots who can't work out the truth, or they know that they would have told the same lies in the sample place, so regardless of what colour you support we are all screwed.

    Given the options, I hope they aren't lying.

  • rate this
    +4

    Comment number 833.

    Not only are we going back to the 19 century we are becoming more, and more the 51st State of America. forget the poor,disabled,old, and unemployed..As Camerooon says we are the party for the HARD WORKING MILLIONAIRES...So they make even more profits, and pay less taxes.!

  • rate this
    +7

    Comment number 832.

    The Toris must live on the moon if they talk about pay rise...

    Workers lost 20% in the last 10years and useless executives gained 300%....

  • rate this
    +3

    Comment number 831.

    544. Walton Simons
    I think you meant..

    Statistics are like bikini’s, they reveal a lot but hide all the important parts.

    - Brian Moore (Talk sport)

  • rate this
    -2

    Comment number 830.

    758.Lightmare
    "more needs to be done, especially around child "benefit".."

    ==

    What's to be done about the "4X4s" then? (those women who have 4 children by 4 different fathers to get the statutory 15% of each's disposable income?

    They're often perfectly comfortable, benefit or not, and not disproportionately inclined to be Labour voters.

  • rate this
    +2

    Comment number 829.

    What a load of complete nonsense. My pay has not changed in the last 3 years, yet diesel has gone up, gas/electric has gone up, my council tax has gone up, supermarket bills are higher... I could go on. And I've had no tax cuts. The pound in my pocket is definitely shrinking...

  • rate this
    +7

    Comment number 828.

    These statistics remind me of the grain reports in Animal Farm, where the other animals are being worked harder and harder and there rations reduced, but the pigs announce that the feed supplies are better than ever to try to convince the animals that what they actually feel and experience must surely be false as the statistics PROVE otherwise, life is now better!

    We're all in it together you see

  • rate this
    +7

    Comment number 827.

    The Government has also produced figures that shows we are all younger than this time last year too. Come off it, David. Who are you trying to kid?

  • rate this
    +6

    Comment number 826.

    770. mushroomfarmer
    "OMG! they're starting to believe their own lies!"

    This is where it gets dangerous; see, they all start thinking the same & then proceed to dehumanise groups.

    Perhaps the poor or unemployed. Comparing them to rats etc.

    Its called the five steps to tyranny. And it usually culminates in the murder of millions of innocent people.

    http://www.youtube.com/watch?v=PeBisBQblFM

  • rate this
    +60

    Comment number 825.

    As anyone who knows statistics can tell you, the data can be manipulated using poor or skewed samples and poorly applied arguments to show false results. I feel that all stats produced by official bodies such as political parties and the police, should be vetted by a neutral expert panel before being touted to the unknowing public. Stas correctly used are amazing but incorrectly are misleading.

  • rate this
    +10

    Comment number 824.

    You have to remember, anyone earning less than £100,000 a year don't exist to Tories.

    So yeah, from their perspective, wages have probably doubled.

  • rate this
    +5

    Comment number 823.

    Excuse me "Nightmare" er sorry Lightmare 636. I am far from mawkish. Unlike you and the Coalition, I DO live in the harshness of the real world.The world "doesn't need" to owe me a living. I hold down 2 jobs and have worked since 1968. Yes maybe I should have used the word "despicable" rather than "criminal"(figue of speech etc) when talking of the immorality of this Govt. It would have sufficed.

  • rate this
    -4

    Comment number 822.

    800.U14758196
    Quickest way to a payrise is to move employer!! After 2 years without a raise I moved on and got a 35% payrise. Luckily there are plenty of IT jobs if you have the skills

    Yes, but the problem is that people without any skills think they are entitled to the same raise, just by showing up and doing their job. And they're not.

  • rate this
    0

    Comment number 821.

    The stats are all very well, lets see the formula for arriving at these figures.

    We need to control our political parties so when a party proposes a study, the opposition parties either subscribe to their formula to do so or propose their own which would run alongside. The findings can then be presented to the public along with the rationale, so the public can make an informed decision.

  • rate this
    +4

    Comment number 820.

    Pull the other one. These fantasy figures are getting ridiculous now.

    Truth is, fiddling the figures is all they have and I actually think that if they hypnotise people into believing things are better then people will go out and spend money they haven't got, or something, and the economy will magically get better.

    They're sounding like the Iraqi Information Ministry now.

  • rate this
    +2

    Comment number 819.

    Pleese excus my ignarance, I am not very good wiv polotics and stuff.

    Pleese excus my speling 2.

    But is ther a elecshon soon???

  • rate this
    +8

    Comment number 818.

    I know David Cameron is lying because his lips moved

  • rate this
    +3

    Comment number 817.

    755.
    mike

    Not so much a draw bridge, but a couple of massive iron gates.
    And yes, they, and the wall, do keep the riff-raff out.

  • rate this
    +1

    Comment number 816.

    Two words spring to mind!!

 

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    Why aren't the financial markets panicking about Greece? BBC Business editor Robert Peston considers the question.

     
  54.  
    11:27: Quote: Cameron on hoax call

    "I had Florence on my back - to add to the exercise regime... My Blackberry went in my pocket - I answered it and it claimed to be a conference call established, which I do obviously very frequently with the head of GCHQ and some of the staff in my office. A voice came through which I didn't recognise, the voice said that he was sorry to wake me up which I thought was strange as it was eleven o'clock in the morning, and so I quite rapidly asked "Who is this?" and the answer came "It is a hoax call" and so I pushed the red button on my Blackberry which ended the call.

    "No harm was done, no national security was breached but it is important when these thing happen to that we do everything we can to put in place systems to weed out hoax calls but every now and again I suspect these things will happen"

     
  55.  
    Email: haveyoursay@bbc.co.uk Get involved

    Louis Lavery emails: Does the "greater security for everyone and every family" include our phone calls, Dave?

     
  56.  
    11:25: Key dates ahead Jo Coburn BBC political correspondent

    The 2015 general election is 101 days away and the parties are ramping up their campaigns for votes. The BBC's Jo Coburn goes through some key dates ahead of the UK choosing a new government.

     
  57.  
    11:21: Labour letter

    Political news site Labour List reports: "A group of 16 Labour MPs have issued a public statement, expressing concern about elements of Labour's policy agenda and urging a change of course in three key areas.

    "The letter - signed by MPs on the left of the Parliamentary Labour Party - calls for an alternative to Labour's current deficit reduction plans, public ownership of the railways and a return to collective bargaining and employment rights in the workplace."

     
  58.  
    11:14: Election debates BBC Radio 5 live

    Broadcasters have proposed TV debates with seven parties taking part. The BBC's John Pienaar imagines what they will sound like… with the help of some creative editing.

     
  59.  
    11:13: Election debates

    "We are making good progress" on the format of the TV election debates, the David Cameron says. "I'm delighted the broadcasters have gone away and thought again.

    "They've actually come up with rather more minor parties than I had in mind. But anyway I'm sure they've thought it all through and they know what they're doing - although I don't quite see why Northern Ireland seems to be missing out because as far as I'm concerned it is an as important part of our United Kingdom as Wales or Scotland.

    "I want to take part."

     
  60.  
    @tessamunt Tessa Munt, Liberal Democrat MP

    tweets: Income tax cuts wouldn't be happening without @libdems in govt. Cameron said they were unaffordable & here's proof - http://bit.ly/15zfwda

     
  61.  
    11:04: Breaking News

    David Cameron has revealed the hoax call came through as he went for a walk with his family after a day trip to Saudi Arabia. He said his mobile rang with the display saying it was a conference call. The person apologised for waking him up. "I thought that was strange as it was eleven o'clock in the morning," said the PM, adding that he did not recognise the voice. He asked who it was and the answer was that it was a hoax call. Mr Cameron said there "no harm done... no national security breached".

     
  62.  
    10:58: Cameron speech

    We must continue to cut the deficit, the PM says. It is not easy but it is absolutely deliverable.

    He says that in the next two years the Conservatives will find a further £13bn of reductions to departmental spending; they will find £12bn of savings in the welfare budget; and they will find £5bn by continuing to make sure the government goes after aggressive tax avoidance and tax evasion.

     
  63.  
    10:57: The Mirror

    Jack Blanchard writes: 101 days to General Election. Here are 101 promises broken by ConDem Coalition government.

     
  64.  
    10:50: Cameron speech
    David Cameron

    Mr Cameron pledges that those earning a yearly income of less than £12,500 will not pay income tax. He also says the Conservatives will increase the 40p income tax threshold.

     
  65.  
    10:45: Cameron speech

    David Cameron says the Conservatives aim to help people by cutting their taxes. "I am a practical, down-to-earth, common-sense Conservative."

     
  66.  
    10:43: Breaking News

    David Cameron has started his campaign speech: "What we want to achieve is greater security for everyone and every family."

     
  67.  
    10:36: Cameron speech

    David Cameron is about to speak in Bursledon, Hamsphire, where he will set out the Conservative Party's third manifesto theme, a Britain that rewards work. You can watch the speech live by clicking on the Live Coverage tab at the top of this page.

     
  68.  
    10:27: Campaign countdown
    Labour MP Mike O'Brian

    There are marginal constituencies across the UK that will signpost which way this election will go. Our Midlands political editor, Patrick Burns, is in Coleshill in Warwickshire - the second most marginal seat in Britain with a Conservative majority of just 54. Labour Parliamentary candidate Mike O'Brian says he thinks it will be a Labour-Tory fight. He says the government's planned high-speed rail route could be a major issue affecting voters.

     
  69.  
    10:14: Polling matters BBC News Channel

    Is a hung Parliament the most likely outcome of the general election?

    More from Ipsos Mori's Ben Page: "A hung Parliament seems to be the most likely outcome... It could change but in 2005 the polls in January were pretty accurate predictions of what happened in May.

    "Polls are just what people are saying now. But the ones that were done in the week of the election back in 2010 were accurate to about plus or minus 1.1% for each party, which I think you'd agree is pretty good actually."

     
  70.  
    #nofracking trending on Twitter

    @suesmee tweets: As my MP, I'd like @neil_mp to vote against Cuadrilla getting the right to drill under my home - without my permission! #nofracking

    @loobylou43 tweets: I'm really hoping my MP @andrewpercy will vote for amendment 51 to the #infrastructurebill today #nofracking

     
  71.  
    10:06: Polling matters BBC News Channel
    Ben Page

    Ben Page, head of the research company Ipsos Mori, has been talking about polls leading up to the election: "Over the last month or so effectively what you've seen is Labour maybe one point ahead of the Conservatives.

    "That is a change on a year ago and they've gradually seen their lead evaporate effectively - but they are neck and neck and nobody seems to come up with something that allows them to break free of the other. It's a war of the weak in a sense."

     
  72.  
    10:04: 100 Constituencies Matthew Price BBC News

    Two interesting comments from voters here in Thurrock. First Harris, a scrap metal dealer. "What people are worried about has changed in the last five to 10 years." That will affect their vote he believes. He's voting UKIP. Second from Linda at Slimming World. "If my dad was alive and I told him I was going to vote anybody else but Labour he'd lynch me. But now you've got so many different parties. Green party, UKIP, what-have-you." It's going to be an unpredictable election.

    The BBC's Today programme will be visiting 100 constituencies between now and polling day.

     
  73.  
    09:56: Greek election fallout

    The right-wing Independent Greeks party has agreed to form a coalition with the Syriza party - which won Sunday's election. You can find out all the latest on this developing story and its implications on the BBC's dedicated Greece live page.

     
  74.  
    Robin Brant Political Correspondent, BBC News

    tweets: re: cameron hoax call, 'blagging' has been an offence since 2000 under the Data Protection Act 1998...

     
  75.  
    09:47: Hoax calls BBC Radio 4 Today
    Jon Culshaw

    Listen as comedian Jon Culshaw relives the moment he successfully hoax called Tony Blair as he impersonated William Hague, then leader of the opposition. It follows the headline from the The Sun newspaper from a drunk man claiming to have "just made complete monkeys out of GCHQ". The caller says the country's surveillance agency, who gave him the personal mobile number of their boss, also got through to the Prime Minister David Cameron.

     
  76.  
    09:41: Breaking News Mark Lowen BBC News, Athens

    It took just an hour of talks between two party leaders for the coalition to be formed. Greece's new government will comprise the leftists Syriza and a rightwing party, Independent Greeks, also fiercely anti-bailout but far more hardline on other policies such as immigration. Alexis Tsipras will see the President later today and be asked to to form a government. He will then argue he has the democratic mandate to revoke the budget cuts and persuade Europe to write off a portion of Greek debt. It'll meet a cool reception from Brussels and Berlin. Tough negotiations lie ahead to find a compromise that prevents Greece from defaulting on its debt: something that could threaten the country's place in the Euro.

     
  77.  
    09:36: Lord Mandelson warning
    Lord Mandelson

    Labour peer Lord Mandelson is warning today that his party must plan properly for a possible coalition with the Liberal Democrats. He tells the Guardian that while an outright victory is still possible, it is not defeatism to consider the consequences of a failure to win a majority.

     
  78.  
    09:33: Your comments: Fracking

    An influential committee of MPs has called for a moratorium on fracking on the grounds that it could derail efforts to tackle climate change. Paul writes: This is absolutely correct. We need to do the right thing out of principle. The only justification for fracking is greed and short term gain. Tim comments: This group of MPs is called influential. Influential but ignorant would be closer to the mark and that's a scary combination.

    Add your views via the comments module on our news story.

     
  79.  
    09:26: NHS concerns Hugh Pym Health editor

    Looking further ahead - the really big question for all parties is how they will fund the NHS over the next five years, particularly at a time, seemingly, of continued austerity. There's also an increasing and aging population, and patients are looking for better access to new drugs.

     
  80.  
    09:21: Questions for Nick
    Nick Robinson

    Are politicians delivering what you want? The BBC's Nick Robinson will be holding a Facebook Q&A about democracy - linked to his current Radio 4 series - at 13:30 GMT.

     
  81.  
    09:17: Campaign issues

    With 101 days to go the BBC has been finding out what issue most concerns you ahead of the election. The NHS emerged as the most important issue for those surveyed, ahead of the economy and immigration.

    Stats
     
  82.  
    09:15: Digital democracy
    House of Parliament

    We have been reporting on the launch of the Speaker's Commission on Digital Democracy this morning. In addition to encouraging online voting and more public participation in debates, one of its five objectives is to "ensure that everyone can understand" what the House of Commons does by 2020. As part of this, it says parliamentary language and procedures should be "simplified".

     
  83.  
    09:10: Hoax call to No 10
    Priti Patel

    Speaking to the BBC about the hoax call made to David Cameron, Treasury minister Priti Patel says "the most important thing right now is that no sensitive information was disclosed". She also stresses there will be a "full investigation" into what happened.

     
  84.  
    09:08: 100 constituencies Matthew Price BBC News
    Colin

    If Conservatives are to see off a double challenge from both UKIP and Labour in Thurrock they'll need core voters like Colin the car dealer to stick with them. He says he wants the current economic policy to continue so he does want David Cameron back in.

    (There is more on the BBC Today programme's 100 constituencies feature at 0755)

     
  85.  
    09:00: Archive treat 100: Robin Day v George Brown Alex Hunt Politics editor, BBC News Online

    Each day from now until 7 May we'll be bringing you a classic election clip from the BBC archives. We've already selected a fair few but do feel free to suggest some via email at politics@bbc.co.uk or via Twitter @bbcpolitics. Here's the first one -

    Robin Day interviewing George Brown

    If you think it all used to be honey and roses for political interviewees here's an election night clip from 1964 as BBC host Robin Day gets on the wrong side of the deputy leader of the Labour Party, George Brown, when quizzing him on the potential nationalisation of the steel industry.

     
  86.  
    08:56: Osborne full interview BBC Radio 4 Today

    The full BBC interview with Chancellor George Osborne is now online.

    Reacting to the anti-austerity party Syriza's win in the Greek elections, Mr Osborne told Today: "If your economy has shrunk you are going to look for other answers...the things the new government has promised, it's going to be very difficult to deliver."

    On Europe he added: "The institutions of the Eurozone are not working well enough for the people of Europe...people get tired of economic failure and rising unemployment."

     
  87.  
    BBC Politics

    tweets: The 2015 general election will be unlike any other http://bbc.in/1D8M48K

     
  88.  
    08:49: Fracking concerns BBC News Channel

    Joan Walley, chairwoman of the Commons Environmental Audit Committee, has told the BBC that they want the move to shale gas to be put on hold because of environmental and safety concerns. You can read more about their report here.

    Joan Walley
     
  89.  
    @robinbrant Robin Brant, BBC political correspondent

    tweets: It's back in action, up and running, primed for daily updates. The @BBCPolitics elex countdownerer @ChrisMasonBBC

    White board
     
  90.  
    Imelda Flattery BBC News

    tweets: Alexis Tsipras expected to speak to gathered journalists shortly. #Greece

    Media scrum
     
  91.  
    08:29: Greek election fallout

    More from the BBC's interview with Yanis Varoufakis, an economist who stood for Greece's Syriza party in the elections. He says a Greek exit from the eurozone is "not on the cards", and the party is not going to go to Brussels "in a confrontational style".

     
  92.  
    BBC Radio 4 Today

    tweets: 'We will take a plan to the #eurozone to minimise this Greek debacle' #Syriza candidate Yanis Varoufakis #R4today

     
  93.  
    08:22: New role for Lord Smith
    Lord Smith

    Lord Smith of Kelvin is to take on another high-profile role, after agreeing to chair of one of Scotland's largest regeneration projects. Lord Smith, who chaired the Smith Commission on Scottish devolution, will lead Clyde Gateway on delivering the post-2014 Commonwealth Games legacy. The work focuses on regenerating Glasgow's east end. Lord Smith was chairman of the Commonwealth Games organising committee and has a number of other top roles. They include chairing Forth Ports and the Green Investment Bank. He will take up his new unpaid role as chairman of Clyde Gateway next month

     
  94.  
    08:18: Hoax call to No 10 Norman Smith BBC Assistant Political Editor

    No 10 stress the PM's phone number was not given out to the hoaxer. However he was put through to the PM by the switchboard.

     
  95.  
    @BBCGen2015 BBC Generation 2015

    tweets: DEADLINE: Just 1 week for 18-24s to sign up to @BBCGen2015 to take part in BBC Election progs

     
  96.  
    @bbcnickrobinson Nick Robinson, BBC Political Editor

    tweets: The Speaker wants you to be able to join in MPs debates & vote online. Good idea? Join in my Q&A on F'book at 1.30 (read more about the online voting plans)

     
  97.  
    08:10: 100 constituencies
    Working men's club

    This will help you put a face to some of the voices in Matthew Price's pre-election package from a working men's club in Tilbury, Thurrock (see 0755). Clearly this was pre-recorded, they weren't drinking on Monday morning.

     
  98.  
    08:05: Hoax call to No 10 BBC Radio 5 live

    The Surveillance Camera Commissioner for England and Wales Tony Porter has told 5 Live Breakfast that the hoax calls to GCHQ and Downing Street were a "concern" and it "doesn't reassure the public and the community". He also said "there'll be a lot of work to eradicate [it]".

     
  99.  
    Andy Burnham Shadow health secretary

    tweets: Warning from @nhsconfed & @LGAcomms about crisis in NHS & care. Labour's 10 year-plan, out tomorrow, offers solution> http://bit.ly/1wxprWw

     
  100.  
    @RobbieGibb

    tweets: On today's #bbcdp - @DouglasCarswell (UKIP), @spelmanc (Con), Andy Slaughter (Lab) and @MartinChelt (Lib Dem)

     

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