A top Tory earning £106k after a pay rise has complained he’s “worried about my overdraft” - while Brits suffer the biggest drop in pay in nine years.
Experts said cost of living crisis had “set in” as official figures showed regular pay tumbled 1.8% in the three months to February, after CPI inflation.
The same figure but month-to-month to February shows a drop of 2.1%, the biggest since August 2013, according to the Office for National Statistics (ONS).
The Resolution Foundation warned there was a gulf between the public sector, where pay fell 3.8% in real terms, and the private sector where it fell only 0.8%.
And today even Armed Forces Minister James Heappey said he was feeling the pinch - despite a pay rise on April 1 taking his salary to £106,619 a year.
Asked if he would publish his tax return, as people are calling for Chancellor Rishi Sunak to do, he told LBC Radio: “I’ve got to be honest, my finances are pretty uncomplicated.
“And like lots of people, by the 20th of the month, I'm pretty worried about my overdraft, rather than any sort of amazing tax [inaudible].”
It comes days after another Tory minister on £115k, Kit Malthouse, said the rise in energy prices was hitting him “very significantly”.
Mr Heappey added despite his tax return being very simple, he would resist calls to publish them because “I actually think MPs should be entitled to a degree of privacy.”
Mr Heappey spoke less than an hour after the ONS published updated figures on weekly earnings falling behind inflation.
According to the CPIH measure of inflation, preferred by the ONS, real regular pay excluding bonuses dropped 1% in the year to the three months ending in February. One a one month basis, the same calculation shows real regular pay dropping 1.3% in the year to February.
The same figures using CPI inflation were 1.8% and 2.1%.
While pay rose 4% in the quarter, it was far outstripped by inflation. And experts warn the cost-of-living crisis will get worse as inflation is set to peak near 9% later this year.
Chancellor Rishi Sunak said the Government was "helping to cushion the impacts of global price rises through over £22 billion of support for the cost of living this financial year".
But business groups said households and companies were already coming under strain from eye-watering price hikes.
Pat McFadden, Labour's shadow chief secretary to the Treasury, said: "Rishi Sunak could have chosen a one-off windfall tax on huge oil and gas company profits to cut household energy bills by up to £600.
"Instead, he's decided to make Britain the only major economy to land working people with higher taxes in the midst of a cost-of-living crisis."
Darren Morgan, director of economic statistics at the ONS, warned: “While strong bonuses continue to mitigate the effects of rising prices on people's total earnings, basic pay is now falling noticeably in real terms."
The latest ONS labour market data also revealed the unemployment rate fell further below levels seen before the pandemic struck, at 3.8% in the three months to February, which is the lowest reading since December 2019 and down from 3.9% in the previous three-month period.
There were 86,000 fewer jobless Britons at 1.3 million in the quarter to February, while those in employment rose 10,000 to 32.5 million.
But the Resolution Foundation warned: “A buoyant labour market is not generating much wage pressure, especially once base effects from furlough are taken into account.
“And with inflation soaring, Britain’s pay squeeze will continue to tighten.
“The current fall in real wages is not projected to end until late 2023, and will leave average wages no higher than in 2007.”
TUC General Secretary Frances O’Grady called for an emergency Budget from Chancellor Rishi Sunak.
She said: “Everyone should have the security to be able to pay their bills. But household incomes are being obliterated as wages fail to keep pace with the spiralling cost of living.
“We can’t go on like this… Rising hardship is a political choice. Ministers must not abandon families in their hour of need.”
Stephen Evans, Chief Executive of Learning and Work Institute, said: “This February, people saw the biggest single month fall in regular pay in real terms since December 2013. But this cost of living crisis is not being experienced equally.
“Bonuses in sectors such as finance mean some are seeing rising pay, while those on the lowest incomes saw their benefits rise by just 3.1% yesterday, far lower than inflation. This is before the rise in National Insurance and the energy price cap, so the pain is only going to grow without action.
“Meanwhile, we continue to see people falling out of the labour market altogether, especially carers, retired people and long term sick.”
