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.
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35 Responses to “Sorry Guido, but the Tories really are presiding over a cost of living crisis”
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.
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
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…
sparky
You should join your local debating society.
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?