POLITICS

Real Wages Have Fallen By 0.5% On Average Under The Tories, New Figures Claim

And the squeeze is set to continue.

31/08/2017 11:57
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Fresh evidence of Britain’s wages squeeze has been seized on by Labour as new figures showed that real earnings have fallen by an average of 0.5% since the Tories came to power.

A House of Commons Library analysis of Office for National Statistics figures revealed the earnings drop after David Cameron became PM in 2010.

London and the South East of England have been particularly badly hit, with real wages falling by an average of 1.2% per cent and 0.9% per cent a year respectively.

House of Commons

Although earnings have picked up in the last couple of years, the most recent figures this month showed that real terms pay fell by 0.5% in the three months to June.

Blogging for HuffPost UK, Shadow Business Secretary Rebecca Long-Bailey urges ministers to act, citing research claiming that “Britain’s high wages relative to other countries in the 18th and 19th Centuries fuelled the industrial revolution”.

The new analysis emerged amid statistics showing productivity has fallen to its lowest for 10 years.

Labour claims that raising wages helps raise productivity by encouraging firms to invest in new technology and training, as well as reducing turnover of workers and motivating staff.

Christopher Furlong via Getty Images

Since the general election, the Tories have been under pressure to end the public sector pay freeze but Chancellor Philip Hammond has resisted calls from Cabinet colleagues to act.

The Institute for Fiscal Studies has warned that “real wages will, remarkably, still be below their 2008 levels in 2021”.

“One cannot stress enough how dreadful that is - more than a decade without real earnings growth. We have certainly not seen a period remotely like it in the last 70 years.”

It was reported this month that take-home pay is still a ‘long way’ from getting back to levels seen before the 2008 credit crunch.

A spokeswoman for the Department for Business, Energy and Industrial Strategy said: “More people are in work than ever before and this government is taking action to raise incomes so people keep more of what they earn. We recognise the rising cost of living is a concern which is why we are cutting taxes, introducing the National Living Wage, and freezing fuel duty.

“At the same time, we are building our Industrial Strategy, to deliver a stronger economy by creating the conditions to boost earning power throughout the UK.”

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