Poverty figures: the real numbers

Tory-Politico gets it wrong

The right-wing blog Tory-Politico takes issue with a recent post of mine in which I pointed out:

"...I sit and gloomily digest the horrible prospect, in the midst of a recession, of Prime Minister David Cameron and Chancellor George Osborne announcing savage and severe cuts in public spending, accompanied by cuts in inheritance tax for the richest members of society....It will, as always, be the poorest, weakest and most vulnerable members of our society who suffer most under a Conservative government."

Tory-Politico (which says its aim is to "promote the Conservative Party") cannot contain its rage:

"Clearly the post author didn't bother to look at any facts before publishing.

Figures released earlier in the year by the Department for Work and Pensions shows that Britain under Tony Blair and Gordon Brown has become amore unequal country than at any time since modern records began in the early 1960s.

Since Tony Blair's third election victory, the poorest 10% of households have seen weekly incomes fall by £9 a week to £147 once inflation is accounted for.

The data showed that the second poorest 10% of households has also had to make do with less since 2005. Overall, the poorest 20% saw real income fall by 2.6% in the three years to 2007-08, while those in the top fifth of the income distribution enjoyed a rise of 3.3%. As a result, income inequality at the end of Labour's 11th year in power was higher than at any time during Margaret Thatcher's premiership."

Actually, the facts are on my side. This particular blogger chooses to highlight only the poverty stats since 2005 (why?), while overlooking the inroads made by this government since 1997. I too am outraged, and depressed, at the rise inequality under Blair and Brown, but that is a separate issue from poverty and the poor, who are always better off under Labour. Here are the actual facts, over the entire period, from the Department for Work and Pensions (DWP):

1. The latest figures on child, pensioner and working-age adult poverty can be found in Households Below Average Income (HBAI) 2007/08. HBAI figures can be downloaded from http://www.dwp.gov.uk/asd/hbai.asp along with a statistical press notice.

2. From 1998/9 - 2007/8 the number of children in relative poverty fell by 500,000, before housing costs are taken into account.

3. From 1998/9 - 2007/8 the number of children in absolute poverty fell by 1.7 million, before housing costs are taken into account.

4. From 1998/9 - 2007/8 the number of pensioners in relative poverty fell by 900,000, after housing costs are taken into account.

5. From 1998/9 - 2007/8 the number of pensioners in absolute poverty fell by 1.9 million, after housing costs are taken into account.

Fact: the government has failed on inequality but succeeded on poverty.

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.