Labour and the unions attacked the Tories’ economic record after new figures showed that workers have been hit with a renewed wage squeeze.
Pay growth in early 2017 fell below inflation for the first time in two-and-a-half-years, according to official figures released yesterday (May 17).
ONS figures showed that average wages increased by 2.1 per cent during the first three months of 2017, the weakest rise since July 2016.
But because of an inflation rate of 2.3 per cent during the same period, wages shrank by 0.2 per cent in real terms – the first decrease since autumn 2014.
The statistics showed that despite the level of unemployment falling to 4.6 per cent in the first three months of 2017, life is tougher under the Tories, as working people struggle in a low wage economy where zero hour contracts and food bank use are both at record levels.
Reiterating the fact that the economy is increasingly unlikely to make work pay, new Resolution Foundation analysis also found that average weekly pay is still £16 lower than it was 2008 – with the current wage squeeze the longest in more than 200 years.
“Working people and their communities are in the grip of the longest pay squeeze since Queen Victoria was on the throne. With no sign of letting up and inflation rising more and more, workers are under constant pressure to make ends meet,” said Unite general secretary Len McCluskey.
“Empty promises from the Tories and backsliding on minimum wage rates will do nothing to cease this income misery.
“Working people need a Labour government. Only Labour will boost the minimum wage to £10 an hour and ensure working people can stand tall again by building an economy based on secure, decent jobs.”
Labour has promised that tackling low wage growth would be a priority if they came to power. This includes increasing the minimum wage to £10 an hour by 2020 and ending the public sector pay freeze.
While the Tories had promised to increase the minimum wage to £9 an hour by 2020, their current manifesto pledge says it will only rise “in line with median earnings” – resulting in an estimated hourly rate of £8.20 by 2020.
TUC general secretary Frances O’Grady said the fall in wages “risks tipping working people into another living standards crisis”.
She said, “That poses a major challenge for whoever forms the next government. Any party that’s serious about giving Britain a pay rise will have a plan to create well-paid jobs in the towns that need them most.
“They will have a plan to raise the minimum wage to £10 as soon as possible. And they will have a plan to stop the unfair pay cuts that are making hard-working midwives, firefighters and nurses thousands of pounds worse off.”
Shadow chancellor John McDonnell said latest figures showed “the Tories’ total failure to improve the living standards of working families”.
He said, “Real wages are lower than they were in 2010, and, after seven years of the Tories, they are now falling again.
“The choice at this election couldn’t be clearer: either a Tory party presiding over a crisis in living standards or a Labour government that will build a Britain for the many, not the few.”