Take-home pay 'rises above inflation'

An analysis of take-home pay figures circulated by the Treasury has suggested all but the top 10% of earners saw a rise in real terms last year. But Labour claim the figures were "dodgy".

Live updates

TUC: Take Govt's figures 'with several tonnes of salt'

The Government's figures on take home pay should be taken "with several tonnes of salt", the TUC has claimed.

TUC general secretary Frances O’Grady said the figures "do not include the effects of tax credits and benefits".

Freezing child benefit has hit families hard.

The figures use the lowest possible measure of inflation (CPI), which excludes housing costs, and is not the one that the government uses to index rail fares (RPI) and other important contributors to living costs.

The analysis also uses the most generous possible measure for wages, and not the one that the Government uses (average weekly earnings) when measuring incomes.

– TUC general secretary Frances O’Grady

IFS: Govt's figures 'do not reflect household incomes'

The Institute for Fiscal Studies (IFS) said the Government's figures on take home pay do not reflect what has happened to household incomes overall.

IFS director Paul Johnson told BBC Radio 4's Today programme that although the Government used "a perfectly sensible set of numbers", there were "two problems" that need to be taken into account.

An analysis of take home pay figures circulated by the Treasury has suggested all but the top 10% of earners saw a rise last year. Credit: Lynne Cameron/PA Wire

He said: "First, we have other sets of data - the Office for National Statistics publishes an average weekly earnings index. That went up quite a lot less quickly than inflation in the most recent months.

"And of course they are not taking account of reductions in things like benefits which were occurring over the time. So if you are looking at household incomes, that will be different from what's happened to take home pay."


Miliband: PM 'doesn't understand' people's lives

Labour leader Ed Miliband said David Cameron has "shown millions of people he doesn't understand their lives" after the Prime Minister claimed there are "positive signs" that take home pay is rising:

Labour: Government's take home pay figures 'selective'

Cathy Jamieson MP, Labour’s shadow treasury minister, said the Coalition's claim that take home pay was rising was based on "highlyselective figures".

The Tories are totally out of touch to claim people facing a cost-of-living crisis are actually better off under them.

These highly selective figures from the Tories do not even include the impact of things like cuts to tax credits and child benefit which have hit working families hard.

The truth is that under David Cameron real wages have fallen by over £1,600 a year and analysis of IFS figures show families are on average £891 worse off as a result of tax and benefit changes since 2010.

At the same time this government has given a huge tax cut to people earning over £150,000.

Back to top