WORKERS in the region are much worse off than a year ago, figures show, because pay rises are failing to keep pace with inflation.

Salaries crept up in most parliamentary constituencies in 2010-11, but the increases fell well short of the five per cent rise in the cost of living.

In some areas, gross pay fell even before inflation, including North Durham (down 2.8 per cent), Sedgefield (down 2.7 per cent), Hartlepool (down 0.5 per cent) and Darlington (down 0.2 per cent).

In others, pay appeared to soar – such as Redcar (up 17.8 per cent) and Bishop Auckland (up 9.2 per cent) – but the Office for National Statistics cautioned that such figures were likely to be anomalies.

It said such sharp rises were often explained by a major employer failing to reply to its survey in the previous year, when Redcar, for example, recorded a significant pay fall.

On average, people in the North-East (up 1.1 per cent) appeared to fare slightly better than either Yorkshire (down 0.5 per cent) or the UK as a whole (up 0.5 per cent).

However, there was alarm over the widening gulf between rich and poor, as public sector workers prepare for a strike on Wednesday.

The bottom tenth of earners saw their pay creep up only 0.1 per cent, at a time of soaring food and energy bills, while the top tenth saw their pay grow 18 times faster.

Trades Union Congress secretary Brendan Barber said: “This great wage stagnation has stifled our economic recovery and could threaten our future prospects. The UK cannot build a sustainable economic recovery on the back of people getting poorer. Young people, in particular, are having to take a big pay sacrifice to get their first jobs.”

The Chartered Institute of Professional Development said the figures suggested the country was heading towards the sort of wage inequality seen in the US.

The figures only measure workers in the same jobs for the previous 12 months and are the median salary – the middle point between the lowest and highest, judged the most accurate guide.

The median salary in London of £27,560 was 42 per cent higher than in the North-East (£19,382) and 40 per cent higher than in Yorkshire (£19,720).