How Cameron misled MPs on living standards

The PM's claim that individuals' disposable income rose last year is not supported by the data.

As Ed Miliband charged him with presiding over a "cost-of-living crisis" at today's PMQs, David Cameron made an eye-catching claim:

What you have to do is look at disposable income as well as wages. Because this government has cut people's taxes, because we are allowing people to keep £10,000 of what they earn before they pay taxes, disposable income went up last year and it is rising as we speak today.

Given that, as Miliband stated, real wages have fallen for 39 of the 40 months that Cameron has been Prime Minister (the exception being April 2013 when deferred bonuses were paid out following the abolition of the 50p tax rate) how can he state that "disposable income went up last year"?

The PM's claim relates to the fact that real household disposable income rose by 1.6% in 2012. This, crucially, is not a measure of individuals' spending power (as Cameron implied), or of average household income, but the figure reached when all households' post-tax income is added together. Since the number of households increases each year (raising the absolute figure), this is a poor guide to living standards.

A better measure is the rate of average weekly earnings growth, which stood at just 0.7% in June-August, a 2% real-terms cut with inflation at 2.7% (the highest level in the EU). Even on the Tories' preferred metric, the picture is a grim one. In the most recent quarter, real household disposable income fell by 0.7% year-on-year. As much as he may wish otherwise, Cameron hasn't got a good story to tell on living standards yet.

David Cameron listens to questions from journalists at Stormont Castle in Belfast, Northern Ireland on October 11, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Grant Shapps on the campaign trail. Photo: Getty
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Grant Shapps resigns over Tory youth wing bullying scandal

The minister, formerly party chairman, has resigned over allegations of bullying and blackmail made against a Tory activist. 

Grant Shapps, who was a key figure in the Tory general election campaign, has resigned following allegations about a bullying scandal among Conservative activists.

Shapps was formerly party chairman, but was demoted to international development minister after May. His formal statement is expected shortly.

The resignation follows lurid claims about bullying and blackmail among Tory activists. One, Mark Clarke, has been accused of putting pressure on a fellow activist who complained about his behaviour to withdraw the allegation. The complainant, Elliot Johnson, later killed himself.

The junior Treasury minister Robert Halfon also revealed that he had an affair with a young activist after being warned that Clarke planned to blackmail him over the relationship. Former Tory chair Sayeedi Warsi says that she was targeted by Clarke on Twitter, where he tried to portray her as an anti-semite. 

Shapps appointed Mark Clarke to run RoadTrip 2015, where young Tory activists toured key marginals on a bus before the general election. 

Today, the Guardian published an emotional interview with the parents of 21-year-old Elliot Johnson, the activist who killed himself, in which they called for Shapps to consider his position. Ray Johnson also spoke to BBC's Newsnight:


The Johnson family claimed that Shapps and co-chair Andrew Feldman had failed to act on complaints made against Clarke. Feldman says he did not hear of the bullying claims until August. 

Asked about the case at a conference in Malta, David Cameron pointedly refused to offer Shapps his full backing, saying a statement would be released. “I think it is important that on the tragic case that took place that the coroner’s inquiry is allowed to proceed properly," he added. “I feel deeply for his parents, It is an appalling loss to suffer and that is why it is so important there is a proper coroner’s inquiry. In terms of what the Conservative party should do, there should be and there is a proper inquiry that asks all the questions as people come forward. That will take place. It is a tragic loss of a talented young life and it is not something any parent should go through and I feel for them deeply.” 

Mark Clarke denies any wrongdoing.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.