UK wages fall among sharpest in EU

The value of UK workers' wages has suffered one of the sharpest falls in the EU, House of Commons library figures show.

The 5.5% reduction in average hourly wages since mid-2010, adjusted for inflation, means British workers have felt the squeeze more than those in countries hit by the eurozone crisis. Spanish workers's wages dropped by 3.3% over the same period and in Cyprus salaries fell by 3% in real terms.

Only Greek, Portuguese and Dutch wages suffered a steeper decline than the UK, the analysis showed, while they rose by 2.7% in Germany and 0.4% in France.

Across the EU as a whole the average fall in wages, adjusted for the European Central Bank' s harmonised index of consumer prices, was 0.7% and in eurozone area 0.1%.

The shadow Treasury minister, Cathy Jamieson, said: "These figures show the full scale of David Cameron's cost of living crisis. Working people are not only worse off under the Tories, we're also doing much worse than almost all other EU countries.

"Despite out of touch claims by ministers, life is getting harder for ordinary families as prices continue rising faster than wages. People on middle and low incomes have also seen tax rises and cuts to tax credits, while millionaires have been given a huge tax cut.

"Ministers keep talking about the global race, but when it comes to living standards it's clear we're losing. David Cameron and George Osborne's economic policies have badly failed over the last three years and working people are paying a heavy price.

"Labour would help middle and low income families right now, including with a lower 10p starting rate of tax, action to tackle soaring energy bills and protecting tax credits for working families by reversing the tax cut for millionaires."

Labour has sought to highlight the rising cost of living in its attacks on the government's economic policies.

Incomes will be £1,520 lower in real terms in 2015 than in 2010, according to Labour analysis of Office for Budget Responsibility forecasts.

Cameron has overseen 35 consecutive months of falling real wages, more than any other prime minister on record, and spending power has dropped in every month but one under coalition rule as price rises outstrip wage increases.

Apart from Cameron, James Callaghan is the only prime minister on record to have overseen more than a year of constantly falling real wages, Labour's analysis of Office for National Statistics figures showed.

The general secretary of the GMB union, Paul Kenny, said: "The government is directly responsible for this unprecedented fall in the real value of wages in the three years since the election.

"Employers paying low wages get taxpayer subsidies in the form of tax credits to assemble a workforce for them to make decent profit margins. The government has also made it easier for employers to abuse staff and made it more difficult for them to do anything about it."

A Treasury spokeswoman said: "The economy is on the mend, but we've still got a long way to go as we move from rescue to recovery and we appreciate that times are still tough for families.

"We are on the right track, the deficit is down by a third, over one and a quarter million new private sector jobs have been created, and interest rates are at near-record lows, benefitting families and businesses."