Sorry Guido, but the Tories really are presiding over a cost of living crisis

Sorry Guido, but there really is a cost of living crisis and it's getting worse under a Tory government.

Guido Fawkes has put up a curious post this morning in which he claims that, rather than there being a cost of living crisis, voters are actually better off now than they were in 2010:

“Throw in the income tax threshold hike (£493), the savings from holding down council taxes (£210) and you have already countered the Balls attack in cash terms – and some – at £1,703. Meaning that in terms of disposable income the “average working person” is better off.”

In other words, the rise in personal allowance and the fact that council taxes haven’t significantly increased since the coalition came to power outweighs the fall in living standards due to prices rising faster than wages.

Unfortunately for Guido and the Tories, this is simply untrue.

Even when excluding the impact that falling wages are having on peoples’ living standards, the Institute for Fiscal Studies (IFS) says that taking into account tax and benefit changes since 2010 a majority of working households are worse off now than they were when the coalition came to power.

As senior research economist at the IFS Robert Joyce puts it:

“Looking at all the measures that are happening that started in 2010 and that are happening to the end of this parliament, if you look at all the measures announced over that period, then most of those families will lose overall because of things like the main rise in VAT back in January 2011.”

And as John Rentoul has also recently noted on disposable income, comparing the last whole year of Labour – Q3 2009 to Q2 2010 – with the most recent year to Q2 2013, real households’ disposable income per head fell by 2.2 per cent.

Sorry Guido, but the coalition really are presiding over a cost of living crisis.

35 Responses to “Sorry Guido, but the Tories really are presiding over a cost of living crisis”

  1. Josh

    What else do you expect from Mr P Staines? I’m surprised he didn’t include praise for his beloved Augusto Pinochet in this piece of intellectual diarrhoea.

  2. Selohesra

    Isnt it obvious that there was a price we were all going to have to pay for Labour’s mismanagement of the economy. Government can’t just magic it better – falling living standards were inevitable whoever was in power

  3. Sparky

    News this week

    1. The Governor of the Bank of England reports that the economy is growing at the fastest rate in 6 years, growth forecasts have been revised upwards, we have low inflation, and unemployment is falling. “The recovery has finally taken hold.”

    Odd how this didn’t find it’s way onto these pages. Instead we had a piece about Amazon selling Gollywogs. Go figure.

    2. Private sector rent arrears are the lowest since 2008.

    Now this doesn’t square with LFF’s constant claim that the people are worse off and struggling to make ends meet.

    Labour wrecked the economy. The Conservatives had to fix it. It was exactly the same in 1979. Spend until there’s nothing left, and waste huge chunks of that money. Moan whilst someone else fixes it.

  4. TheBlackFingerNail

    Rubbish

  5. guidofawkes

    Disposable income is up for the lowest decile and down for the highest decile. Isn’t that what you lefties want? To reiterate, disposable income has risen for the poorest – do you want to bring back banker’s bonuses? We could restore the top rate to 40% and raise average disposable earnings.

    You realise your position is that there is a “cost of living crisis” because the richest are worse off? Data [see chart] shows poor better off.

    I never expected you to outflank me from the right. This never used to happen in Will Straw’s day.

  6. hatchepsut

    Have you actually asked any of us poor folk? My wages are NOT going up. My fuel and food bills have increased massively. My tax credits have been capped. The extra money from the increase in tax threshold was wiped out by a reassessment of my housing benefit to rent an overpriced ex-council house that costs twice as much per month to rent as it would have if still owned by the local authorities. Trust me, my disposable income is far from up.

  7. leftfootfwd

    According to the IFS, the poor will be the hardest hit in the coming years as a result of the government’s changes to the benefits system.

    While the incomes of the wealthiest fell the most in the initial stages of the downturn, it is the poor who are feeling the squeeze now and who will continue to be hardest hit as
    benefit reforms take effect in 2015/16 and beyond.

    Senior research economist at the IFS, Robert Joyce, said much of the
    pain for lower-income groups was “occurring now or is still to come
    because these groups are the most affected by cuts to benefits and tax
    credits”: http://www.ifs.org.uk/pr/inequality_recession_june2013.pdf

  8. guidofawkes

    Projected. Hasn’t happened. Probably won’t. Growth projections are being revised up and, call me a cynic, next year we may see some tax cuts as I posited in the original article

    You not going for my idea of restoring the 40% rate and raising average disposable income? Shame…

  9. sparky

    You should join your local debating society.

  10. Sparkyboy

    But that’s just you. You’re extrapolating from a sample size of one. I’m better than off than ever. That means that the Uk is thriving. See?

  11. JJ

    No mention of the failure of the banks and their irresponsible lending contributing to the economic crash then?

  12. blarg1987

    Think you will find economic mismanagement has been 30 years in the making, first started by the Conservatives and carried on by New Labour.

  13. sparky

    In 2011 Financial Services in the UK:

    Contributed 9.6% of UK GDP in 2011
    Contributed £63bn in taxation revenue.
    Employees in the financial sector contributed 15% of UK income tax, despite making up just 4% of the nation’s employees.

    Yes, their financial models contributed to an economic crash in 2008. But prior to that they contributed to periods of economic boom that have vastly benefited businesses and employees and living standards. It’s called Capitalism, and it has lifted millions of people out of poverty across the world. Far more people have benefited from free markets than ever have, or will, from socialism.

  14. LB

    Tax. Not a factor? Think again. The Condems have screwed people with tax to pay for Labour’s pissing money up the wall.

  15. LB

    So how much did the banks cost? Hmmm. lets see. Ah yes, the BoE booked a profit because they charged penal rates of interest. Then there’s all the tax from the banks that weren’t incompent. About 400 bn in taxes, and so far no payouts for losses. The compenstation all came from the compentent banks.

    Meanwhile, hows the state doing? All that money its received and ‘invested’.

    Hmmm, pension debts? Off the books a la Madoff. The deficit there is 734 bn a year, all down to Labour, On top of the borrowing deficit.

  16. LB

    So you’re not getting other people’s money – tax credits – they are better off.

    Has your productivity increased to justify the extra money?

    You’re not getting other people’s money – HB – they are better off.

    You’re still getting a subsidised rent – council house – paid for by someone else – and you want more of their money?

    Here’s an off the wall idea. Go up to someone else’s door, knock on it, and ask them for the money directly. Cut out the middle man. You could even thank them for the hand out.

  17. LB

    Just wait until the real disaster. Pensions. The state hasn’t invested, its spent. The pensions debt is going up at 734 bn a year (ONS), with total taxes at 600 bn. You don’t have to be a socialist to work out the consequences

    Who gets hit the hardest? The poor. They were forced to rely on the state, and the state has defrauded them. That’s social pensions for you.

  18. Frank100

    phowee!

  19. frank100

    Some aspects were carried on by new labour within the framwork determined by thatcher but they managed to achieve quite a bit of good too! We have seen how thatcherism culminated with the banking crash in 2008.

  20. Dr Lathwell

    Tory’s promised to match the spending in 2007. Some of the material they’ve been deliberately deleting over the past week, along with Osbornes speech that he’d deregulate the banks and financial sector further, which would’ve caused a greater debt burden.
    Go out and research the subject not just listen to the Tories bull! You’ve got a brain – use it!

  21. LB

    And so did Labour. They wiped their site too.

  22. Mason Dixon, Autistic

    A chart that only goes to 2011/12? You high?

  23. David Rimmington

    Guido was right on one count – both the Tories and Liberals deserve to lose in 2015!!

  24. jimmydefish

    Historically speaking Fawkes was a dutch mercenary NOT one of the main plotters so I should guess from the pooh you are saying Fawkes that someone is paying you to comment on stuff you are not quite sure about . probably one of those aristocrat types with more money than sense. Get your name right, Fawkes would have for anyone if they paid him enough money to do the killing so your user name shows how much we can trust you – not a lot.

  25. hatchepsut

    Tax credits are not other people’s money, they are credits on tax already paid. I don’t want other people’s money, it is a situation that has been forced upon us by out of control capitalism and privatisation. My partner and I both work hard and yet still earn no where near enough to support our family. When rents and the cost of living are so high and wages are so low, we don’t have a chance. House prices have spiralled so far out of control that few people will ever have a hope of buying their own home. The housing benefit I get does not go to me, it goes to my landlady. She is the one living a life of luxury on “other people’s money”. Things have changed so much in recent years. Life is not easy for younger families anymore.

  26. TM

    We are returning to the politics of the 19th century. The rich don’t want to pay their taxes, many Middle class people collude in this as long as they get their affluent careers and the best housing, education and able to live well, and the people at the bottom can get all the crap heaped on them, keep getting undercut and have to accept low wage jobs, zero hours contracts and uncertainty as part of their existence. Not a good way to run a modern 21st century democracy and in no way fair, but the people at the top and many in the middle tacitly accept it as long as they don’t suffer in any way.
    Guido is living in a fantasy land, and is either a government shill, a Tory or someone who is personally wealthy and so the hard cold reality impinging on many of us isn’t reaching his no doubt well heated ivory tower.

  27. LB

    Unless you are a net contributor, you are taking other people’s money.

    If you need HB, you are taking other people’s money.

    Unless you pay 2K a year per person for the NHS, you are getting it out of other people’s money.

    Rents are high for two reasons. Supply and demand. Demand is up because lots of economic refugees have arrived. Pay is down for similar reasons. You’re being under cut by migrants. Ditto for house prices.

    Housing benefit goes to you. It’s your money. It’s a subsidy paid for by other people. Or is it that Waitrose should supply your food for free?

    Where I agree, life isn’t easy. But that the state for you. Screwing people over so people like you get their money. Just wait however, and see what happens in your old age. The state has a 6,500 bn debt hidden off the books – for pensions.

    If you’re a civil servant, it will be dire. After all, people like you will demand their housing benefit, and given a choice, your HB or their pension, you will choose to do them over.

    It’s the new game. The state blaming others for their crimes.

  28. Johnny

    It seems that we have more important priorities for our finances like helping India to get to Mars or making sure that our corrupt, mis-managing bankers get their well deserved bonus’s paid by the taxpayer, We also seem to need to protect the greedy lying utility companies so that they can carry on ripping us off.
    We can pay for all this by cutting NHS and welfare services at home. To hell with the ordinary people who have contributed for most of their lives.
    In the meantime the country’s wealth is been filtered out to foreign bank accounts
    The all concept of austerity measures is a disguised ideology to get Britain back to the good old Victorian days
    Cameron keeps going on about “hard working people getting rewarded”. But it seems that the harder you work the more you are screwed. The hard working man and women in the street are not getting these rewards. The only incentive they are getting is to work until they are 70 and have a poor old age. Only the corrupt, friends of Dave seem to be getting any reward
    By your reasoning Labour must have wrecked the rest of the World’s economy as well ?
    No wonder Dave and Co are laughing all the way to their foreign tax havens

  29. LB

    I doubt he’s a shill. He’s exposed the corruption.

    The problem is that there aren’t enough rich to pay for the state. Consider Richard Branson. Two points come to mind.

    1. He’s left the UK. Income inequality has now been reduced. If you are on the left that has to be good news? Ho hum, shows that point of view for the farce that it is.

    2. Consider the deficit. First you have to say which deficit? Income – spending, or the increase in debts. Lets go with both.

    a. Income – spending = 120 bn a year. Branson is worth 3 bn. So we confiscate all his money and sell it off. Not quite sure who is going to buy, but …

    (3 / 120) * 365 = 9 days. All that’s happened is that the borrowing stops increasing for 9 days. Now what? Who are you going to target now.

    b) The true debt, pensions included, is going up at 850 bn a year.

    Take all his cash, and the debt hasn’t gone up for 31 hours.

    That shows what the state of the state is. It’s bust. Anyone who thinks otherwise is living in a fantasy land. Pensions matter.

    So it is returning to the politics of the 19th century. The left can’t get the cash from the rich to pay for the state. They can’t get it from the middle class either, because turkey’s won’t vote for Christmas. So that leaves the poor up shit creek.

    They are up shit creek because the state forced them to be dependent on the state, and now the state is bankrupt they are going to be destitute.

    All down to running a Ponzi pension scam.

  30. jimmydefish

    But he is probably funded by them too! Not only is he connong himself but he is conning us too.

  31. hatchepsut

    Anyone that uses Waitrose as their initial example of a place to get food clearly has no clue what life is like for us plebs. Migrants are not the problem. Corporate greed is the problem. Wages are low because employers know they can get away with it. They know we will get our wages topped up by benefits so they pay us less and keep more for themselves. They are the ones taking other “other people’s money”. also I repeat, my landlady gets my housing benefit. It goes directly to her. Rents have soared because landlords realised they could keep upping rents, knowing that the benefits system would cover it. I have no options, they do.

  32. LB

    You’re being teased on Waitrose. Mind you MPs had a John Lewis list. So you don’t want to have cooperatives as your place of shopping.

    Migrants are a major issue. Not all of them. Some we need and should accept. However, we should not allow people in who need HB like yourself.

    Wages are low because they don’t have to pay. Partly because the state screws us to pay you. Then because demand is so high because they increased the supply driving down wages.

    As for HB, you receive it. Doesn’t matter what label you put on it, its other people’s money given to you to live. Rents have soared, because demand has increased because of the unfettered migration. So you are in the market for low rent properties, and you’re having to compete against the low skilled low paid migrant. 5.8 million have arrived recently. No surprising what the result was. That was Labour’s plan. They weren’t bright enough to work out the consequences. You’ve been screwed as a result.

    It will get far worse for you. It’s back to the big problem. Pensions. They have spent all the money you’ve given them. There is just the debt left. That’s rising at 734 bn a year, and total taxes are 600 bn. If you’re forced to rely on the state, you will be screwed.

  33. hatchepsut

    So you genuinely believe that without migrants our employers would voluntarilly pay us much better wages and our landlords would reduce our rents? There would still be a supply and demand issue without all the migrants due to the housing policies of the past 30 years of governments. Selling off all the council houses started the problem and no one intervened before it got out of control. Even without migrants in this country, employers are competing in a global economy with countries where staff are paid pennies. As long as they can get away with it they will continue to pay us as little as possible, I have no foreign migrants working where I work and yet I still only get minimum wage, which is not enough to live off.

  34. LB

    What I think is that the market kicks in.

    A shortage of workers puts upwards pressure on wages as employer’s compete for those workers.

    Currently, the workers are competing for the jobs because the supply has been inflated. That drives down the price of workers.

    Likewise with landlords. Without 5.3 million extra people to house, what do you think happens? Renters pick and choose. A better property for the same price, or a similar property for a lower price.

    Supply and demand.

    Notice that selling off council housing didn’t change the number of houses. It’s gone up as new are built over all. Or is it that you’re complaining that you can’t get your housing paid for out of other people’s pockets. Winging that other people want to spend their money on their needs, not on yours?

    Global economy does apply, for some jobs. How are you going to outsource the NHS for example, to India?

    Yep, min wage has an issue, You get taxed on min wage. Made poorer by the state.

    So what’s your problem? You’re advocating the state taking money off other people, why are you complaining when money gets taken from you.

  35. Russ

    Selling off assets that the taxpayer has supported, more wealth going to an elite minority, whilst the workers become poorer. Anybody who has supported the Bullendon Boys in the sale of assets taxpayers have funded must have a perverse sense of logic and perhaps by applying your support to this farcical coalition is akin to owning up to being intellectually bankrupt.

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