GE2015: UK Living Standards

 

Professor David Gordon

Prof. Dave Gordon, Professorial Research Fellow in Social Justice

A copy of the research paper is available at: <http://www.poverty.ac.uk/editorial/uk-living-standards-pse-election-briefing>

The change in UK living standards is one of the key contested issues in the May 2015 General Election.  The Coalition government argues that living standards have increased since it came to power in 2010.  The Labour Party and other opposition parties claim that living standards have fallen.

In March 2015, the Chancellor George Osborne presented evidence in his final Budget that living standards have increased. This evidence is misleading.  Research from a range of reputable academic studies has shown that average income has fallen over the past five years and poverty has increased.

The latest available data clearly show that the living standards of the UK population have fallen, particularly since the April 2013 cuts in Social Security and other austerity measures took effect.  More people in the UK are now in financial difficulties and increasing numbers are unable to afford both the necessities of life (such as two pairs of shoes) and minor luxuries, such as a one week holiday away from home.  Both fuel poverty and utility bill arears have increased.  These are the stark conclusions from a comparison of the change in UK living standards between 2009 and 2013, based on early release data recently provided by the UK Government to the European Statistical Office (EUROSTAT).

The Chancellor’s claim that living standards have risen is fallacious as the National Accounts household sector data he used are primarily a measure of the movement of money not the living standards of households. Real Household Disposable Income (RHDI) measures the total income of households compared with the rest of the economy. There is no information about how the total expenditure or income is distributed at the individual or household level.  Thus, if only the richest 1% have a rise in their incomes, this will also increase the average income in the household sector by exactly the same amount as if the increase had been shared equally by everybody. RHDI cannot provide a good or adequate measure of living standards.

There is only one conclusion that can be drawn from the available scientific evidence – the majority of the UK population has suffered from a fall in their living standards during the current government’s term of office. Both the poor and the majority have indeed ‘all been in it together’ – only the richest appear to have escaped.

About the Author

Professor Dave Gordon is Professorial Research Fellow in Social Justice and Director of the  Townsend Centre for International Poverty Research at the University of Bristol.

The views expressed here are personal views and do not reflect the views of the funders of our research.

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