Government hits back at critics on pay growth

LONDON Tue Mar 18, 2014 11:55am GMT

Workers look at their phones while walking at the Canary Wharf business district in London February 26, 2014. REUTERS/Eddie Keogh

Workers look at their phones while walking at the Canary Wharf business district in London February 26, 2014.

Credit: Reuters/Eddie Keogh

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LONDON (Reuters) - Most workers in Britain have seen their wages rise by more than inflation in recent years, the government said, seeking to counter a key argument of the opposition Labour party ahead of an election next year.

Chancellor George Osborne, who is due to deliver his annual budget statement on Wednesday, has been under fire from Labour over what it calls Britain's cost-of-living crisis: slow wage growth and high inflation.

But on Tuesday the Treasury said its research showed that wages of people who have held the same full-time job for at least a year have grown faster than inflation, in each year since 2006, apart from 2011 when inflation topped 5 percent.

The big drag on overall wages in recent years has been the level of pay earned by people getting back into work after the deep recession caused by the financial crisis, or those changing jobs, it said.

Overall wage growth in 2013 stood at 2.2 percent for full-time workers, lower than the 2.6 percent inflation rate during the year. But for people who were in the same full-time job throughout 2013, wages rose 3.3 percent, it said. About two-thirds of all current full-time employees have had the same job for more than a year.

The Treasury said its research was based on official data from the Office for National Statistics. A spokesman said the Treasury was unable to provide details on which sectors had driven the wage increases cited in the analysis.

Labour dismissed the findings as "totally out of touch" with the real world.

"It ignores the one-third of full-time workers who have not stayed in continuous employment and the 27 per cent who work part-time," lawmaker Chris Leslie, a Labour spokesman on finance, said in a statement.

ONS data shows that for the British workforce as a whole, pay including bonuses in the three months to December was just 1.5 percent higher than a year earlier.

(Reporting by William Schomberg; editing by David Milliken, Larry KIng)

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