Tory Chancellor George Osborne’s boasts to have helped “hardworking people” were shattered yesterday following official figures revealing that families were not benefiting from Britain’s spreadsheet recovery.

Household income has been falling steadily since 2009 despite Gross Domestic Product (GDP) rising, the Office for National Statistics showed.

Its economic wellbeing study showed real household disposable income — a key measure of living standards — was still in decline at the end of 2013.

Economist Michael Burke said the Tory decision to introduce the indicator has “completely backfired on them.”

He explained an unprecedented decline in wages and benefits along with the attack on public services is behind the embarrassing slump for Ms Osborne.

He told the Star: “What they show is that, for most people, living standards are continuing to decline quite markedly.

“GDP per head is falling as more of us enter the workforce but are increasingly doing so in low-skill, low paid and part-time work.

“This is austerity at work. Only the very rich and owners of capital are benefiting.”

A TUC spokesman said the figures are further proof that “working people are not getting a fair share of the benefits of economic growth.

“If people continue to get poorer even as the economy starts growing again we could end up with an unbalanced recovery and even greater inequality, which could cause another huge economic crisis,” he said.

Labour leader Ed Miliband also used the data to insist that his reliance on his “cost-of-living-crisis” campaign still hits home with the public.