Despite the sort of spin that we saw last Friday, people really are worse off under the Tories.
This time last week members of the government were telling journalists that, after a long period of malaise, living standards were once again on the rise.
The economy had been growing for some time and, so Tory HQ presumed, it would be credible to claim that living standards had now caught up with inflation (never mind that the Office for National Statistics had recently said the opposite).
Well today we’ve seen a categorical refutation of such claims from no less than the respected (and independent) Institute for Fiscal Studies (IFS).
In its 2014 Green Budget, the IFS says that as things stand there is “little reason to expect a strong recovery in living standards over the next few years”. It adds that “real earnings are not expected to return to their 2009–10 levels until 2018–19” (Chapter 6, page 1).
While the respected indepenent think tank says that the fall in median income has probably now halted, they add that real median household income is still more than 6 per cent lower than before the economic crisis hit in 2007-08.
Incomes at the top have fallen faster than incomes at the bottom since the crash, but it is the poor who have experienced higher levels of inflation, as food and energy prices have risen much faster than the average between 2008 and 2013. The IFS estimates that, since 2008, average annual inflation has been 1 percentage point per year higher for the lowest-income fifth of households than for the highest-income fifth.
The key point, though, is that real earnings remain much lower than their 2009/10 levels, and are unlikely to return to those levels for four to five years.
Despite the sort of spin that we saw last Friday, people really are worse off under the Tories.Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.
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