Wages fail to keep up with rising bills

Apr 21 2008 by Adrian Pearson, The Journal

FAMILIES in the North East are struggling to keep up with rising bills as wages fall behind living costs, experts have warned.

The average weekly pay in the North East remains the lowest in England and in some parts of the region salaries are now falling as well-paid jobs disappear.

As mortgage repayments and fuel costs continue to increase, a detailed look at average wages has revealed that the average person in the region earns around £388 a week – just 2% higher than last year.

In the South East the average wage is almost £100 higher and rising faster.

Last night Blaydon MP Dave Anderson said the figures should prompt the Government to fulfil a promise to relocate more Government jobs out of the South East into poorer regions.

Workers in Newcastle and Sunderland, traditionally the powerhouse of the North East economy, saw average wages rise by just 0.1% in the 12 months up to December, with jobs in North Tyneside now offering weekly wages worth 9% less than 2006.

But as wages slow down, costs have continued to increase. RPI inflation – which takes into account rises in council tax and mortgages – was last month at 3.8%, and has only just come down from 4.1% in February.

The average weekly cost of running a home with a mortgage has gone from £130 in 2002 to £230 now, while the average monthly petrol bill has increased by 16.5% over the last year to £116, as the price of fuel hits an all-time high.

Experts at respected think-tank Centre for Policy Studies warned the Government it must act to prevent the economy suffering from the dual effects of stagnating earnings and the higher cost of living.

Charles Elphickie, who co-authored the report, said: “Rising effective interest rates and growing household running costs means that British households are more vulnerable to, and less prepared for, any economic downturn.

“The Government’s increases in taxation and the recent availability of easy credit is a potentially toxic mixture.

“Pay packets have not kept pace. That is why the Government’s claim that we are better off is nonsense.”

The effects of the economic slow down will be felt most in Northumberland, where three of the six districts reported a drop in average income.

Families trying to survive on the average wage earned in Wansbeck will have to make do with £355 a week – 15.6% lower than in 2006.

Mr Anderson said the Government had to follow some simple steps to reduce the impact of rising prices.

He said: “There is a big difference between day-to-day costs in the North and the South but that shouldn’t entirely excuse the difference in wages.

“Moving Government jobs from the South to the North should have been prioritised, and with the way things are going it’s a promise we should do our best to fulfil.”

Last night union chiefs were calling on Gordon Brown to do more for poorer paid workers.

Paul Kenny, general secretary of the GMB, said: “It takes a strong person to change their mind when it becomes clear that a mistake has been made.”

Figures show the average weekly wage for people working in each district as defined by council boundaries. Figures are for 2007 and show the change on previous 12 months.

England: £460.30 (+2.7%

North East: £388.10 (+2%)

Alnwick: £286.50 (+3.6%)

Berwick-upon-Tweed: £261.90 (-2.6%)

Blyth Valley: £351.20 (+2.7%)

Castle Morpeth: £370.20 (-8.0%)

Tynedale: £357.40 (+4.2%)

Wansbeck: £355.70 (-15.6%)

Gateshead: £407.00 (-0.7%)

Newcastle: £415.00 (+1.6%)

North Tyneside: £360.60 (-9.6%)

South Tyneside: £358.20 (+3.9%)

Sunderland: £388.30 (+2.9%)

Chester-le-Street: £384.40 (+11%)

Derwentside: £371.50 (+0.6%)

Durham: £407.90 (+ 1.6%)

Easington: £381.20 (+6.5%)

Sedgefield: £405.70 (+10.1%)

Teesdale: £315.10 (-10.3%)

Wear Valley: £394.40 (+8.8%)