SNP accuse Tories of putting leadership before cost-of-living crisis as regular pay falls at fastest rate
Between March and May, pay excluding bonuses was down 2.8 per cent from a year earlier when adjusted for inflation, while pay including bonuses was down 0.9 per cent, according to the Office for National Statistics (ONS).
Regular wages excluding bonuses plunged by 3.7 per cent over the three months to May against the rate of consumer price index (CPI) inflation, representing the biggest slump in more than 20 years.
It comes after inflation hit a 40-year record of 9.1 per cent in May and is expected to reach as high as 11 per cent later this year.
SNP Treasury spokesperson Alison Thewliss said: “As the Tory made cost-of-living crisis continues, we are seeing the fastest drop in regular pay since records began while food, fuel and energy prices continue to soar.
“Household budgets across Scotland and the UK are being hammered, but the UK Government is too busy focussing on the Tory leadership contest to help or care.
“Inflation is already at its highest level in 40 years and is set to rise further in autumn. People need help now, not September or October when the Tories have finally decided who they want to lead their party.”
Regular pay, excluding bonuses, rose slightly to 4.3 per cent over the three months to May without taking inflation into account.
The figures also show the average pay growth for the private sector was much higher than for the public sector – at 7.2 per cent for the same period compared to 1.5 per cent, again before taking account of inflation.
Virgin Money is among private companies to take action on wages, telling the majority of its staff they will receive a £1,000 one-off bonus to help with the soaring cost of living.
The banking group said all of its employees who are paid £50,000 a year or less, which represents 78 per cent of its workforce, would be eligible.
The number of UK workers on payrolls rose by 31,000 between May and June to 29.6 million, the ONS said.
ONS head of labour market and household statistics David Freeman said: “The number of people in employment remains below pre-pandemic levels and, while the number of people neither working nor looking for a job is now falling, it remains well up on where it was before Covid-19 struck.
“With demand for labour clearly still very high, unemployment fell again, employment rose and there was another record low for redundancies.
“Following recent increases in inflation, pay is now clearly falling in real terms both including and excluding bonuses.
“Excluding bonuses, real pay is now dropping faster than at any time since records began in 2001.”
James Reed, chairman of recruitment business Reed, told the BBC’s Today programme the UK was experiencing "a two-speed workforce".
"You might be seeing 25 per cent-plus pay offer increases to get people to move jobs,” he said. “But then we're seeing other parts of the economy where pay hasn't moved much at all and that is concerning because more and more people will end up living in in-work poverty.”
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