The Centre for Policy Studies has today released a short 'Perspective paper' by Charlie Elphicke: Are you better off than you were four years ago? PDF here.
The paper notes that the "real growth in average incomes has stagnated over the last four years (averaging just 0.5% a year), particularly when compared with income growth in the first period of Labour government (when income growth averaged 4.7% a year in real terms)."
The CPS concludes:
"Are you better off now than you were four years ago?" was the "killer question" asked by Ronald Reagan in the 1980 presidential debate. Asked today, the answer of the average UK household would be a resounding: "NO!"
I'm wondering if this theme could be a potent campaign ad for 18DoughtyStreet.com? Stagnating disposable incomes + rising utility bills + rising cost of buying a home... It certainly fits in with the Year of the Striver theme.
Related links: Charles Elphicke on YourPlatform.
Averages are usually misleading. The Government are taking more but they are largely getting away with it because people's spending power has kept up, is my take. I may be overinfluenced by living and working in London where anything financial services related has been having it very good; and this influences hugely the whole London economy.
One thing not in the statistics is rising house prices and rising stock markets (the latter since spring 2003 after some bad years). Both of these make differing proportions of the middle classes feel better off and the distinction between income and capital is not as rigid as it was. With most mortgage lenders these days it is no questions asked if you add a bit to your mortgage, and many will not feel they are consuming capital because they will be withdrawing a lot less than the house has gone up in value. Also a lot more people are inheriting money. But these things are less evenly spread than the middle class incomes alongside which they nestle.
I had a real grouse with private schools when they kept shoving up the fees 8% a year in 2000-03 despite plunging stock markets and often falling dividends, pointing out to the school that a material proportion of fee payers (whether the parents themselves or grandparents) were dependent on investments and yet they were still promoting their grandiose schemes for new swimming pools etc. It did not have much effect and it was only later that the concurrent public school "fee fixing" scandal emerged.
So, it's not as simple as these statistics.
Posted by: Londoner | March 15, 2007 at 16:20
The answer is 'yes' personally. But of course this is all about the right's desire to make the debate about tax cuits and so repeat the disasters of 2001 and 2005
Posted by: E L Marberry | March 15, 2007 at 16:39
What a stupid comment. Anyone reading the papers today would see that George Osborne warmly endorsed the report. And anyone following the link and reading the thing would see that the report does not go on about tax cuts - I read it as making the point that Mr and Mrs average Briton are no better off and Britain is as divided as ever.
It looks to me like this is more leadership wing than right wing. And it's good to see a real thinker who attacks the Labour Party rather than moronic ranting about this faction or that. All in all, not a bad bit of work by Charlie Elphicke.
Time for Marberry et al to wake up, smell the coffee, learn to spell and realise that things have changed - we're all bored of factional rubbish and we're heading for Government. He should seriously think about joining in.
Posted by: You Twit | March 15, 2007 at 18:18
Its a good piece of research, using govt stats, that cuts through Brownite spin to reveal the true state of the economy.
Good work Charlie!
But why didn't the party come up with this sort of analysis itself?
Posted by: TaxCutter | March 15, 2007 at 19:15
Another nice, sharp piece of research. The Brown Model isn't working.
Posted by: William Norton | March 15, 2007 at 19:27
We've never had it so good.... and we know it. We complain about a 'tax rise' here and there as we sit on property that is increasing in price by the second....
Posted by: J.S. | March 15, 2007 at 20:49
Que est den gookle,ja?
Du ist dien laderhargden uber der CC isten.
Du est!!!
Posted by: comstock | March 15, 2007 at 21:07
Just look at the credit expansion - Brown is taxing the substance and then letting banks offer credit so people can consume.
The whole country is undergoing a Leveraged Buyout - Savings are nationalised through dividend tax credit abolition and people forced to borrow more.
Now he has fully milked the National Lottery to pay for teacher training and Dome II after funding Wembley Stadium and Dome I from Lottery proceeds
We have the Artful Dodger as Prime Minister and Fagin as Chancellor
Posted by: ToMTom | March 15, 2007 at 21:46
COMMENT OVERWRITTEN BY EDITOR - COMMENT WAS FROM IMPERSONATOR - THE IP ADDRESS HAS BEEN BANNED.
Posted by: Iain_Dale | March 15, 2007 at 22:43
"We've never had it so good.... and we know it. We complain about a 'tax rise' here and there as we sit on property that is increasing in price by the second...."
Is that a joke?
How exactly is increasing property prices a good thing? Most people would like a bigger house. This will now cost them more money, and they will spend longer/more paying interest to the bank to pay it off.
Young people have scant chance to afford the kind of house that's suitable for raising a family.
Posted by: matthew | March 15, 2007 at 22:47
Well my home & plot have earned quite a bit so in theory I have more wealth, but as regards disposable income & what I can get for it definitely worse off.
Realising the increased value in property is very difficult - without becoming intentionally homeless. Don't think I'm unique
Posted by: Ted | March 15, 2007 at 22:48
The "Iain Dale" comment at 22:43 is clearly a spoof. Maybe someone trying to get back at him for requiring registration to comment on his site?
Posted by: Londoner | March 16, 2007 at 01:12
The answer must be "yes" although it's no thanks to the Bliar government. We had to come abroad to achieve it
Posted by: pjb | March 16, 2007 at 06:48
Perhaps DC would like to shove the finding's down B-Liars throat at the next PMQ's.
Posted by: George Hinton | March 16, 2007 at 11:18
On the issue of rising house prices, most people feel in their water that it's a good thing, yet very few people gain from it.
1. If you sell your house, it's still the same house it was before, but you will need more money to buy another, and you don't gain anything unless you trade down.
2. When you buy another, Gordon Brown takes a bigger slice in stamp duty, and you've very likely gone through the threshold to a higher % rate of stamp duty as well.
3. If you inherit a house, you're now far more likely to pay IHT, yet it's still the same house it was a few years ago when it would have been well below the threshold. And your buyer will have to pay far more stamp duty than previously, money which you could have had because it gets knocked off what the buyer can afford.
4.If you withdraw capital/increase your mortgage, however you like to think of it, you're actually just borrowing money which will have to be paid back in the end.
G Brown knows that people feel 'comfortable' with rising house prices, salivating away at the thought of all the profit they've made, but the reality is as above - it's bad and no-one should enjoy it - and Conservative spokesmen should be making these arguments.
Posted by: clive elliot | March 16, 2007 at 11:39
Clive
Unless of course you decide to move to a country with lower housing costs - must admit I'm considering this is a few years time.
Posted by: Ted | March 16, 2007 at 13:44
The "Iain Dale" comment at 22:43 is clearly a spoof.
That obvious? I must admit it was hardly bremner material. I was so drunk I'm surprised I managed to type clear english TBH.
Maybe someone trying to get back at him for requiring registration to comment on his site?
Nah, just the after effects of an afternoon watching cricket in the pub.........
THE IP ADDRESS HAS BEEN BANNED
Somebody techie will explain this better than I can, I've got a dynamic IP or something or so someone tells me. Basically you can't ban me without banning the whole of NTL or Virgin Media or whatever they are calling themselves this week........
Posted by: comstock | March 16, 2007 at 17:14
Not the "whole" of NTL because it sets the IP in bands and allocates an IP from within that band since there are not enough IPs to go around on a hard-wired basis. Of course if you don't power-down your modem Comstock chances are it is the same IP.
The other way is simply to follow Ian Dale into registration and frighten off all the Conservative activists frightened that Francis Maude will match their IP to their DNA samples
Posted by: TomTom | March 16, 2007 at 17:31
Not the "whole" of NTL because it sets the IP in bands and allocates an IP from within that band since there are not enough IPs to go around on a hard-wired basis. Of course if you don't power-down your modem Comstock chances are it is the same IP.
Was that in English LOL! Just joking, I barely understand how to switch this laptop on, let alone about IPs. :D
I'm on dial up so I'm not hardwired to anything, though, so I'm not sure how it works. I don't power down my modem execept presumably when I switch off the laptop.......
In any event I should also apologise, if too much damage hasn't been done for it to be accepted.........
Posted by: comstock | March 16, 2007 at 17:52