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4 October 2021

Why Boris Johnson was wrong to say wages are rising

Average earnings have spiked due to Covid-19 factors but fell in the most recent quarter.

Boris Johnson’s claim during an interview on The Andrew Marr Show on 3 September that the UK is finally experiencing wage growth has prompted a backlash. Labour’s deputy leader Angela Rayner tweeted: “That is a lie, real wages are falling.” 

Who’s right? Data from the Office for National Statistics (ONS) shows that in the three months to July 2021, average weekly real wages – which take into account inflation – fell from £491 in April to £488 in July. 

However, the pandemic has complicated the picture, and the ONS has warned that current earnings data should be interpreted with caution. Job cuts in low-paid sectors contributed to an increased average wage across the workforce, while headline inflation figures remained low in much of 2020. 

Other ONS data shows that annual average weekly wages grew by 6.8 per cent for the months of May-July 2021 compared with April-June last year.

Year-on-year comparisons, however, are distorted by the fact that in spring-summer 2020, many workers were on furlough or had their hours reduced, further pushing down weekly wages in the early months of the pandemic. 

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The controversy over Johnson’s remarks on earnings at the weekend comes as the Conservatives vow to solve labour shortages through higher wages for British workers. The Tories have criticised Labour following Keir Starmer’s offer of visas to 100,000 foreign workers to help fill lorry driver vacancies.

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