George Osborne during a visit to the Royal Mint on March 25, 2014 in Llantrisant, Wales. Photograph: Getty Images.
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Why the Tories can't declare that the living standards crisis is over

Average pay excluding bonuses remains below inflation. For most, there is still no recovery at all. 

Today is the day that George Osborne and his Treasury team have been waiting for. After falling for five consecutive years*, average wage growth (1.7 per cent) has finally crept above inflation (1.6 per cent). Expect the Tories to cite the figures as proof that the recovery in the macroeconomy is feeding through into people's pockets and that the "cost-of-living crisis" is abating. (Although it's worth noting that the wage figure is from February, while the inflation figure is from March. Inflation in February stood at 1.7 per cent. In other words, pay was merely flat that month.)

But there's a catch: while average pay is up by 1.7 per cent, pay excluding bonuses is up by just 1.4 per cent, a real-terms cut. That will allow Labour to warn that this remains a recovery for the City of London, not the country at large. As Ed Balls noted in his Guardian article on Monday: "Average earnings figures, which can be driven by large pay rises at the top, often mask what is happening in the middle and at the bottom. We know that bankers' pay in London, where most of the top earners are based, grew nearly five times faster than the pay of the average worker last year."

Even after average pay (excluding bonuses) finally outstrips inflation, there will be no rise in real incomes for the millions of public sector workers who have had their salary increases capped at 1 per cent and for those most reliant on benefits. 

For the rest, after five years of falling living standards, it will take more than a few months of growth to make up the ground lost since the crisis. In 2015, as the IFS has repeatedly pointed out, real incomes will still be far below their 2010 level, with voters currently an average of £1,600 a year worse off. Many in the private sector remain stranded in low-paid, part-time jobs (1.42 million people are working part-time because they can't find full-time jobs) that do not provide enough for them to maintain their family's living standards.

As Balls noted at his post-Budget briefing last month, this will be the first time on record that real incomes have ever been lower at the end of a parliament than at the start (paving the way for Miliband's "Reagan moment"). Indeed, based on the RPI measure of inflation (which includes housing costs), the OBR forecasts that wages will be flat until 2019; there will be plenty of people who feel no better off in the next decade, let alone in the next year. The price of many essentials, such as housing, food, energy and transport, continues to rise faster than the general rate of inflation. 

Rather than suggesting that the crisis is over, the Tories would be wiser to offer solutions to it. As the Conservative group Renewal has argued, the party should look to significantly increase the minimum wage in real-terms, build a million homes over five years, and strengthen consumer protection. The Tories' greatest weakness remains that they are viewed as "out of touch" by most voters; they would be foolish to confirm this perception by declaring the war won while millions are still struggling. 

* The exception being April 2013, when high-earners collected their deferred bonuses to benefit from the abolition of the 50p tax rate.

George Eaton is political editor of the New Statesman.

Screengrab from Telegraph video
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The Telegraph’s bizarre list of 100 reasons to be happy about Brexit

“Old-fashioned light bulbs”, “crooked cucumbers”, and “new vocabulary”.

As the economy teeters on the verge of oblivion, and the Prime Minister grapples with steering the UK around a black hole of political turmoil, the Telegraph is making the best of a bad situation.

The paper has posted a video labelled “100 reasons to embrace Brexit”. Obviously the precise number is “zero”, but that didn’t stop it filling the blanks with some rather bizarre reasons, floating before the viewer to an inevitable Jerusalem soundtrack:

Cheap tennis balls

At last. Tennis balls are no longer reserved for the gilded eurocrat elite.

Keep paper licences

I can’t trust it unless I can get it wet so it disintegrates, or I can throw it in the bin by mistake, or lose it when I’m clearing out my filing cabinet. It’s only authentic that way.

New hangover cures

What?

Stronger vacuums

An end to the miserable years of desperately trying to hoover up dust by inhaling close to the carpet.

Old-fashioned light bulbs

I like my electricals filled with mercury and coated in lead paint, ideally.

No more EU elections

Because the democratic aspect of the European Union was something we never obsessed over in the run-up to the referendum.

End working time directive

At last, I don’t even have to go to the trouble of opting out of over-working! I will automatically be exploited!

Drop green targets

Most people don’t have time to worry about the future of our planet. Some don’t even know where their next tennis ball will come from.

No more wind farms

Renewable energy sources, infrastructure and investment – what a bore.

Blue passports

I like my personal identification how I like my rinse.

UK passport lane

Oh good, an unadulterated queue of British tourists. Just mind the vomit, beer spillage and flakes of sunburnt skin while you wait.

No fridge red tape

Free the fridge!

Pounds and ounces

Units of measurement are definitely top of voters’ priorities. Way above the economy, health service, and even a smidgen higher than equality of tennis ball access.

Straight bananas

Wait, what kind of bananas do Brexiteers want? Didn’t they want to protect bendy ones? Either way, this is as persistent a myth as the slapstick banana skin trope.

Crooked cucumbers

I don’t understand.

Small kiwi fruits

Fair enough. They were getting a bit above their station, weren’t they.

No EU flags in UK

They are a disgusting colour and design. An eyesore everywhere you look…in the uh zero places that fly them here.

Kent champagne

To celebrate Ukip cleaning up the east coast, right?

No olive oil bans

Finally, we can put our reliable, Mediterranean weather and multiple olive groves to proper use.

No clinical trials red tape

What is there to regulate?

No Turkey EU worries

True, we don’t have to worry. Because there is NO WAY AND NEVER WAS.

No kettle restrictions

Free the kettle! All kitchen appliances’ lives matter!

Less EU X-factor

What is this?

Ditto with BGT

I really don’t get this.

New vocabulary

Mainly racist slurs, right?

Keep our UN seat

Until that in/out UN referendum, of course.

No EU human rights laws

Yeah, got a bit fed up with my human rights tbh.

Herbal remedy boost

At last, a chance to be treated with medicine that doesn’t work.

Others will follow [picture of dominos]

Hooray! The economic collapse of countries surrounding us upon whose trade and labour we rely, one by one!

Better English team

Ah, because we can replace them with more qualified players under an Australian-style points-based system, you mean?

High-powered hairdryers

An end to the miserable years of desperately trying to dry my hair by yawning on it.

She would’ve wanted it [picture of Margaret Thatcher]

Well, I’m convinced.

I'm a mole, innit.