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
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
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: Massage Therapist / Sports Therapist / Physio / Osteopath

£12000 - £24000 per annum: Recruitment Genius: An opportunity has arisen for o...

Recruitment Genius: Account Manager / Sales Executive - Contract Hire

£35000 - £60000 per annum: Recruitment Genius: This industry leader provides c...

Recruitment Genius: Project Coordinator

£28000 - £30000 per annum: Recruitment Genius: A Project Coordinator is requir...

Recruitment Genius: Area Sales Manager - Midlands

£20000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Day In a Page

John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
Forget little green men - aliens will look like humans, says Cambridge University evolution expert

Forget little green men

Leading evolutionary biologist says aliens will look like humans
The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

The Real Stories of Migrant Britain

An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy
UK heatwave: Temperature reaches 39.8 degrees on Central Line - the sweatiest place in London

39.8 degrees recorded on Tube

There's hot (London) and too damn hot (the Underground). Simon Usborne braved the Central line to discover what its passengers suffer
Kitchens go hi-tech: From robot chefs to recipe-shopping apps, computerised cooking is coming

Computerised cooking is coming

From apps that automatically make shopping lists from your recipe books to smart ovens and robot chefs, Kevin Maney rounds up innovations to make your mouth water
Jessie Cave interview: The Harry Potter star has published a feminist collection of cartoons

Jessie Cave's feminist cartoons

The Harry Potter star tells Alice Jones how a one-night stand changed her life
Football Beyond Borders: Even the most distruptive pupils score at homework club

Education: Football Beyond Borders

Add football to an after-school homework club, and even the naughtiest boys can score
10 best barbecue books

Fire up the barbie: 10 best barbecue books

We've got Bibles to get you grilling and smoking like a true south American pro
Wimbledon 2015: Nick Bollettieri - Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power

Nick Bollettieri's Wimbledon Files

Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power
Ron Dennis exclusive: ‘This is one of the best McLaren teams ever – we are going to do it’

‘This is one of the best McLaren teams ever – we are going to do it’

Ron Dennis shrugs off a poor start to the season in an exclusive interview, and says the glory days will come back
Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Cheaper energy on the way, but it's not all sunshine and rainbows

Cheaper energy on the way, but it's not all sunshine and rainbows

Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most