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Coalition claims rise in UK real term wages


Today the coalition government have claimed that the majority of British workers outside of the top 10% of earners have seen their take-home pay rise in real terms.

The figures produced by the coalition government show take-home wages have risen by 2.5%, which is 0.1% higher than the annual Consumer Prices Index (CPI) increase of 2.5% to the year April 2013, with Prime Minister David Cameron stating that there were “some positive signs on take-home pay. The Prime Minister did however say that a broad-based recovery on people’s finances would still take some time.

The figures released though, were rubbished by Labour, who branded the figures as “highly selective” which do not take into account changers to benefits. The Labour party further went on to claim that the figures are based on weekly, not annual earnings and that real-term annual earnings have fallen by £1,600 since 2010.

Chuka Umunna, shadow business secretary said: "They are looking at individuals in isolation without looking at the impact of government changes to people's household incomes."

He added: It illustrates just how out of touch they are when they go to the lengths they have over the last 24 hours to try and convince people to give them a pat on the back."

Paul Johnson did give a more balanced perspective to the argument, claiming that the coalition government had used a “perfectly sensible set of numbers” to calculate take-home pay for the entire 2012-2013 tax year. He did however point out that the most up to date data from the Office for National Statistics (ONS) exhibited that wage rises were actually “quite a lot less” than inflation in recent months, but this could change if the economy continues to strengthen.

"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" he continued.

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