How the rich deferred bonuses to avoid the 50p tax rate

Earnings rose by an unusual high of 2.1% in the latest quarter but only because bonuses were paid in April, rather than March, to benefit from the new 45p rate.

At a time when Labour is attacking the coalition for presiding over a "cost of living crisis", the latest figures on earnings contain the superficially good news that the average weekly wage, including bonus payments, rose by 2.1% between April and June compared with the same period last year - the first time the growth rate has exceeded 2% since late 2011. 

But read on and it soon becomes clear what lies behind the spike. The ONS notes that "The relatively high growth rate for April to June 2013 partly reflects unusually high bonus payments in April 2013. Some businesses have reported that they paid bonuses in March last year but in April this year." 

The ONS doesn't explain why they did so, but it might just have something to do with the fact that April was the month that the cut in the top rate of tax to 45p took effect. Had businesses paid out bonuses in March as usual, they would have been taxed at the higher rate of 50p - this was avoidance on a grand scale. 

If we strip out bonuses, average weekly earnings rose by just 1.1%, 1.8% below the rate of CPI inflation. As the Conservatives resurrect the myth that "we're all in this together", today's figures are a salutary reminder that we're not. 

George Osborne attends a press conference on July 19, 2013 during the G20 Finance Ministers and Central Bank Governors' meeting in Moscow. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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I believe only Yvette Cooper has the breadth of support to beat Jeremy Corbyn

All the recent polling suggests Andy Burnham is losing more votes than anyone else to Jeremy Corbyn, says Diana Johnson MP.

Tom Blenkinsop MP on the New Statesman website today says he is giving his second preference to Andy Burnham as he thinks that Andy has the best chance of beating Jeremy.

This is on the basis that if Yvette goes out first all her second preferences will swing behind Andy, whereas if Andy goes out first then his second preferences, due to the broad alliance he has created behind his campaign, will all or largely switch to the other male candidate, Jeremy.

Let's take a deep breath and try and think through what will be the effect of preferential voting in the Labour leadership.

First of all, it is very difficult to know how second preferences will switch. From my telephone canvassing there is some rather interesting voting going on, but I don't accept that Tom’s analysis is correct. I have certainly picked up growing support for Yvette in recent weeks.

In fact you can argue the reverse of Tom’s analysis is true – Andy has moved further away from the centre and, as a result, his pitch to those like Tom who are supporting Liz first is now narrower. As a result, Yvette is more likely to pick up those second preferences.

Stats from the Yvette For Labour team show Yvette picking up the majority of second preferences from all candidates – from the Progress wing supporting Liz to the softer left fans of Jeremy – and Andy's supporters too. Their figures show many undecideds opting for Yvette as their first preference, as well as others choosing to switch their first preference to Yvette from one of the other candidates. It's for this reason I still believe only Yvette has the breadth of support to beat Jeremy and then to go on to win in 2020.

It's interesting that Andy has not been willing to make it clear that second preferences should go to Yvette or Liz. Yvette has been very clear that she would encourage second preferences to be for Andy or Liz.

Having watched Andy on Sky's Murnaghan show this morning, he categorically states that Labour will not get beyond first base with the electorate at a general election if we are not economically credible and that fundamentally Jeremy's economic plans do not add up. So, I am unsure why Andy is so unwilling to be clear on second preferences.

All the recent polling suggests Andy is losing more votes than anyone else to Jeremy. He trails fourth in London – where a huge proportion of our electorate is based.

So I would urge Tom to reflect more widely on who is best placed to provide the strongest opposition to the Tories, appeal to the widest group of voters and reach out to the communities we need to win back. I believe that this has to be Yvette.

The Newsnight focus group a few days ago showed that Yvette is best placed to win back those former Labour voters we will need in 2020.

Labour will pay a massive price if we ignore this.

Diana Johnson is the Labour MP for Hull North.