Media Watch: ‘Better off’ with the Tories? Don’t believe a word of it

Tory press spins Institute for Fiscal Studies budget analysis to boost George Osborne


When reporting on yesterday’s budget, it seems the devil is in the details.

‘We ARE better off with George’, yelped the Daily Mail today, waving analysis of chancellor George Osborne’s budget by the Institute for Fiscal Studies (IFS):

“Families will be better off this year than they were when the coalition came to power, independent experts said yesterday.

“In a boost to George Osborne, the Institute for Fiscal Studies said it was ‘very likely’ that household incomes would be higher this year than in 2010. […]

This claim is echoed by the Sun, which said:

“After scrutinising the budget, IFS director Paul Johnson said: ‘Average household incomes are finally rising, and probably will be higher in 2015 than they were in 2010, and possibly higher than their 2009 peak.'”

Sounds impressive, doesn’t it? But here’s the full quote from Mr Johnson’s statement. Note the very next line, missing from the Sun:

“Average household incomes have just about regained their pre-recession levels. They are finally rising and probably will be higher in 2015 than they were in 2010, and possibly higher than their 2009 peak. But that still represents by far the slowest recovery in incomes in modern history.

Having household incomes crawl back up above pre-recession levels six or seven years after the recession hit is no cause for celebration.”

Strange that a sensationalist tabloid like the Sun would leave out the line “slowest recovery in modern history”

In both the Mail and the Telegraph (‘Living standards boost a blow for Labour’), the IFS remarks above are included, albeit near the end of the stories. As is often the case with right-wing newspapers (especially the Mail), you get a more accurate picture if you read the story backwards.

But these claims about Osborne’s success deserve a closer look.

As the stories note, Labour’s claim that people are £1,600 worse off in 2015 than in 2010 is based on data from a few months ago, and uses the Retail Price Index to measure inflation, rather than the Consumer Price Index or the RPIJ.

But as this graph from Full Fact demonstrates, whichever measure you use on average people will be worse off than in 2010 by at least £900.

Wage gap

On the other hand, the IFS says Osbone’s claim that people are £900 better off is based on net incomes, rather than gross earnings. Comparing the claims of the two parties, Mr Johnson said:

“As ever there is much truth in both numbers. Real earnings have fallen, as Mr Miliband says. Real incomes should be above their 2010 level as Mr Osborne says.

“We are for sure much worse off on average than we could reasonably have expected to be back in 2007 or indeed back in 2010.

So when the Tory press claims that people are ‘better off’ than in 2010, one question you have to ask is, ‘compared to what?’ “The slowest recovery in modern history” is nothing to boast about, you would think. But boast they do.

Another question to ask is, ‘better for whom?’ The IFS says people on middle and upper-middle incomes have been ‘remarkably insulated’ from tax and benefit changes.

The Sun budget front page

And this is one more IFS conclusion the Tory press fails to mention. George Osborne claims the richest have borne the greatest burden of these deficit-busting policies, and that’s true – but only if you start counting from when Gordon Brown was still prime minister.

If you exclude Labour’s more equitable policies and start from when the Tories took charge in 2010, the picture is very different:

“Looking at changes over the period of the consolidation as a whole the richest have been hit hardest.

Looking only at changes implemented by the coalition the poorest have seen the biggest proportionate losses.

All of this shows that for millions of people on low or middle incomes, this government has left them worse off, with the people who were already ‘better off’ being ‘insulated’ from St George’s magic touch – whatever you read to the contrary.

Adam Barnett is a staff writer at Left Foot Forward. Follow him on Twitter

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