Fall in wages puts Britain in Europe's bottom four

Only workers in Greece, Portugal and the Netherlands have fared worse over the past three years

British workers have suffered one of the biggest falls in real wages among European countries over the past three years, with only crisis-hit Greece, Portugal and the Netherlands doing worse.

New figures collated by the House of Commons Library show a 5.5 per cent drop in wages after inflation since 2010. This follows other recent national statistics on the rising cost of living and a substantial fall in living standards since the first of George Osborne's austerity budgets was delivered three years ago.

The shadow Treasury secretary, Cathy Jamieson, said the figures, released by the Labour Party yesterday, showed that not only was Britain worse off under the Conservative-led coalition, but the UK was doing much worse than most other EU countries.

Ms Jamieson said: "Life is getting harder for ordinary families, as prices continue rising faster than wages." She attacked David Cameron and the Chancellor as "failing badly over the past three years, with working people paying a heavy price".

The new wages and salaries analysis, covering the 11 quarterly figures since autumn 2010, showed Greece faring worst, with an 11.3 per cent drop, and Bulgaria leading the index with a 13.2 rise in real wage levels. Britain's two main EU competitors, France and Germany, both showed increases in real wage levels.

Professor John Van Reenen, director of the Centre for Economic Performance at the London School of Economics, described the fall in real wages in the UK as "stunning – and something that did not happen in previous postwar recessions in Britain". He said the weak performance reflected poor growth and linked it to falling GDP and national income, "which is now 3.5 per cent smaller than it was before the financial crisis".

Professor Van Reenen added: "Labour is right to say that if the Government had pursued better policies, such as not cutting investment so dramatically since 2010, then growth would have been better and living standards higher."

Labour's renewed focus on the economic fallout from the UK's poor growth is in stark contrast to claims made yesterday by the Treasury Secretary, Sajid Javid, that the UK economy has "regained momentum" and a full-blown economy recovery is now under way in Britain.

Writing in The Daily Telegraph, Mr Javid claimed "the plan [George Osborne's] is working" and Britain was now "out of intensive care".

Improved performance figures for house prices, car sales and manufacturing have helped boost belief among Conservative ministers that they are now in a strong position to battle Labour on the economy – something seen as unlikely at the beginning of the year.

Using a largely uncosted extrapolation of Labour's spending outlines, Mr Javid claimed that a current Labour government would cost every UK taxpayer £3,000 this year. The figure bears a strong resemblance to a recent TUC warning that UK workers were more than £2,000 a year worse off because wages have failed to keep pace with soaring living costs.

The fight over who is telling the truth about the effects of austerity-led policies means, as in previous general elections, that the economy is now likely to dominate the next two years.

Responding to Mr Javid, Ms Jamieson said: "Failed economic policies have led to a cost-of-living crisis and £245bn more in borrowing than planned. This was caused by the recovery being choked off three years ago."

Labour's own internal forecasts predict that working people are set to lose an average of £6,660 across the five years of the Cameron government. The party intends to take the message – that this is "the slowest recovery on record" – into the coming party conference season.

Professor Van Reenen said the full picture on wages was not exactly clear. "Growth has been held back by the poor performance of our main export markets, such as the eurozone, and a dysfunctional banking system. Flexible UK labour markets with real wage cuts have also meant unemployment is much lower in the UK than in many other European countries. Had real wages not fallen, the jobs situation could have been much worse."

Start your day with The Independent, sign up for daily news emails
Life and Style
Marie had fake ID, in the name of Johanna Koch, after she evaded capture by the Nazis in wartime Berlin
historyOne woman's secret life as a Jew in wartime Berlin
News
news... and what your reaction to the creatures above says about you
News
Jihadi John
newsMonikers like 'Jihadi John' make the grim sound glamorous
News
newsAnother week, another dress controversy on the internet
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Telesales & Customer Service Executive - Call Centre Jobs

£7 - £9 per hour: Recruitment Genius: Are you outgoing? Do you want to work in...

Ashdown Group: Finance Manager - Covent Garden, central London - £45k - £55k

£45000 - £55000 per annum + 30 days holiday: Ashdown Group: Finance Manager - ...

Ashdown Group: Systems Administrator - Lancashire - £30,000

£28000 - £30000 per annum: Ashdown Group: 3rd Line Support Engineer / Network ...

Recruitment Genius: Graduate Web Developer

£26000 - £33000 per annum: Recruitment Genius: A Web Developer is required to ...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003