To ask the Chancellor of the Exchequer what the level of national average earnings has been in each year since 1974 at (a) current prices and (b) today's prices; and what the real terms increase was each year.

The information requested falls within the responsibility of the National Statistician, who has been asked to reply.

Letter from Len Cook to Mr. Michael Meacher, dated 6 December 2004

As National Statistician I have been asked to reply to your recent Parliamentary Question asking what the level of national average earnings has been in each year since 1974 at (a) current prices and (b) today's prices; and what the real terms increase was each year. (199553)

Currently average earnings are estimated from the Annual Survey of Hours and Earnings (ASHE). Prior to 1998 average earnings were estimated from the New Earnings Survey (NES), and are provided for full time employees on adult rates of pay whose pay was unaffected by absence during the pay period. This is the standard definition used for ASHE and NES tables. The ASHE does not collect data on the self employed and people who do unpaid work.

I attach a table showing the Average Gross Weekly Earnings of full time employees for 1974 to 2004 based on current and today's prices. Earnings data at today's prices has been calculated with reference to the all items Retail Prices Index (RPI). The RPI is an average measure of the change in prices of goods and services bought for the purposes of consumption by the majority of UK households. For the purposes of this calculation, it is assumed that RPI is an adequate measure of changes in retail prices faced by those particular groups covered by the ASHE.

The ASHE, carried out in April of each year, is the most comprehensive source of earnings information in the United Kingdom. It is a one per cent sample of all employees who are members of pay-as-you-earn (PAYE) schemes, but because of its sampling frame, it has difficulty capturing data on people with very low pay. It is therefore likely to under-represent relatively low paid staff earning below the tax threshold.

The Annual Survey of Hours and Earnings publication criteria ensures that all estimates are undisclosive. A number of estimates have been removed from the published tables for these reasons.

⁽²⁵⁾ Earnings data at today's prices has been calculated with reference to the all items Retail Prices Index (RPI). The RPI is an average measure of the change in prices of goods and services bought for the purposes of consumption by the majority of UK households. For the purposes of this calculation, it is assumed that RPI is an adequate measure of changes in retail prices faced by those particular groups covered by the Annual Survey of Hours and Earnings.

⁽²⁶⁾ 1974 to 1983 compiled on basis of men aged 21+ and women aged 18+.

⁽²⁷⁾ 1983 and 1984 onwards compiled on basis of employees on adult rates.

⁽²⁸⁾ 1998 to 2003 are figures from the NES survey with ASHE methodology applied.

⁽²⁹⁾ 2004 ASHE data including supplementary surveys to improve coverage.

Source:

1974 to 1997 New Earnings Survey, Office for National Statistics 1998 to 2004 Annual Survey of Hours and Earnings, Office for National Statistics.