Wage falls are ‘worst since records began’

NEW figures show directors of leading companies have seen their total earnings increase by a fifth over the last year while UK workers as a whole have endured the biggest fall in real wages since records began.

TUC General Secretary Frances O'Grady
TUC General Secretary Frances O'Grady

A study by Incomes Data Services showed the average earnings for a director of a FTSE 100 company was £2.4 million, rising to £3.3 million for chief executives.

The average bonus for chief executives was more than £1 million and almost £2 million for long-term incentive plans.

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Steve Tatton, editor of the IDS report, said: “FTSE 100 directors have seen their total earnings jump sharply in the last year, fuelled by a rise in the value of share-based awards.

“Bonus payments have also recovered strongly following a downturn last year.

The figures contrast with new research from the TUC suggesting UK workers as a whole are suffering the longest and most severe decline in real earnings since Victorian times.

The TUC said workers face the seventh consecutive year of falling real earnings, a situation that has no historical precedent.

Even the long depression of the 1920s was shorter, said the union organisation, adding that the total decline in earnings since 2007 is over eight per cent.

The TUC is staging a national demonstration on Saturday under the banner Britain Needs A Pay Rise.

General secretary Frances O’Grady said: “It’s shocking that even the most infamous periods of pay depression in the last 150 years pale into comparison when looking at the current seven-year collapse in earnings.

“The Government says the economy is growing again, but there’s no evidence of any recovery in ordinary workers’ pay packets. Across the country people are struggling to make ends meet as their pay lags behind prices and there seems to be no end in sight to their financial misery.

“Vast swathes of Britain are long overdue a pay rise. That’s why we expect to see tens of thousands join our march next weekend, calling politicians and employers to help them share in this recovery and be able to start spending again without fear of falling into debt.”

Meanwhile, a highly critical report from one of the main training awards bodies, City & Guilds, says policies on skills have “flipped” between departments and the system had been disrupted by constant change and ministerial reshuffles.

There have been 61 secretaries of state responsible for skills and employment in the past 30 years, producing 13 major Acts of Parliament, says the report.

City & Guilds chairman Sir John Armitt said: “They say that insanity is doing the same thing over and over again, and expecting different results.

“It would be madness to ignore the evidence of three decades of skills and employment policy yet our politicians have failed to learn from the past. This report is a wake-up call to all policymakers.”

Neil Carberry, the CBI’s director for employment and skills, said: “This report is a welcome and much-needed call for clarity and coherence, and should be used to kick-start an era of policy stability in skills provision, with a real focus on putting the needs of our economy at the heart of vocational learning.”