While David Cameron changed tack at PMQs today and admitted that living standards are falling (but that Labour was to blame), it seems that Philip Hammond didn’t get the message. The Defence Secretary told The Daily Politics:
I think living standards are starting to rise again after what has been a very, very difficult period with a huge reduction in our national income. I think everybody in this country understands that if our national income contracts by 7.5 per cent that has an impact on living standards.
But when challenged by Andrew Neil to name “any measure” that showed this, he was forced to concede:
I haven’t got a specific measure I can quote. But what’s happening is we are seeing a recovery in the economy, we’re seeing people benefitting from the measures that we’ve taken to increase the tax free personal allowance, to freeze council tax, to freeze fuel duties, so that those pressures on living standards where the government does have some direct ability are being managed. And, as the economy starts to grow again, we will see living standards continuing to recover.
The exchange continued:
AN: Oh, continuing to recover, so you say they’re recovering, so by what measure are you using to justify the claim that living standards are now rising.
PH: Well, as our national incomes rise again, living standards will rise.
From “living standards are starting to rise” to “living standards will rise” in just one minute.
Unfortunately for the Tories, even under George Osborne’s preferred measure of Real Household Disposable Income, which includes the incomes of charities and universities (and as the IFS warned, “should certainly not be used in isolation to measure how they [living standards] are changing”), living standards are forecast to fall this year. And even once they start to rise, they still almost certainly be below their 2010 level at the time of the general election.
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