The Tories' claim that living standards have risen is nonsense on stilts

The claim that almost all earners are better off entirely ignores the cuts to in-work and child benefits. Trying to fix the figures won't work.

For all the talk of recovery this week, the unpalatable truth remains that most people are still getting poorer. In the last quarter, average weekly earnings rose by just 0.9 per cent, less than half the rate of inflation (2 per cent). As long as the wage squeeze continues, the Tories will struggle to rebut Ed Miliband's warnings of a "cost of living crisis" - and it could cost them the election. While the Conservatives have established a comfortable lead on who would best manage the economy, they continue to trail Labour on who would do most to improve family incomes (the same trend seen during Obama vs. Romney). 

Aware of this, the Tories have resorted to statistical chicanery that would make even Iain Duncan Smith blush. In an article in today's Times, George Osborne's protégée Matthew Hancock, the skills minister, claims that the "crisis" spoken of by Miliband is a mirage. He writes: "The story is said to go like this: yes, there are a record number of jobs but the rich are getting richer and incomes are falling for everyone else. Right? In fact, wrong."

While the ONS's recent annual survey of earnings (for April 2012 to April 2013) shows that median wages (2.1 per cent) rose slower than inflation (2.4 per cent) for the fifth year running, Hancock claims that the increase in the income tax personal allowance means that almost everyone is better off. He writes:

New facts on take-home pay — the pound in your pocket — are stark. Last year take-home pay grew faster than inflation for every group of earners except the top 10 per cent.

For those in the middle, squeezed by the great recession, take home pay rose by 4 percent. The top tenth were the only group who saw their take home pay grow by less than prices. So the bottom 90 per cent of earners saw the wages they took home rise faster than consumer inflation last year.

He adds: "[T]he monthly average earnings figures measure income before tax and, thanks to our tax cuts, low and middle-income earners are paying much less of it. Last year we cut the tax paid by a typical taxpayer by £320. By this April most people will be paying £705 less in income tax than before the election. Those on the minimum wage will have seen their income tax bill cut by almost two thirds."

Were it true that living standards are rising for most people, the Tories would have a better story to tell on the economy. Unfortunately for them, it's not. First, the data used by Hancock takes no account of the cuts to in-work and family benefits introduced by the coalition, such as the real-terms cut in child benefit, the uprating of benefits in line with CPI inflation rather than RPI, and the cuts to tax credits (other major cuts such as the bedroom tax, the benefit cap, and the 10 per cent cut in council tax support were introduced after April 2013). The IFS has consistently shown that almost all families are worse off (see table below) once all tax and benefit changes are taken into account. But the Tories, for entirely political reasons, won't mention this.

The other main problem with the statistics is that they exclude the UK's 4.36m self-employed workers, many of whom have suffered disproportionate falls in their income, and those who don't earn enough to pay National Insurance (the source of the ONS data), both of which combine to create a more flattering picture. 

In an attempt to present austerity as progressive, Hancock notes that his figures of choice show that disposable income did not rise for the top 10 per cent. But this was before the government cut the top rate of tax from 50p to 45p in April 2013, handing an average tax cut of £107,500 to the UK's 8,000 income millionaires. The irony is that the one month since 2010 when average earnings rose faster than prices was April 2013 (which the figures used by the Tories conveniently include), when high earners collected the bonuses they deferred in order to benefit from the reduction in the top rate. 

One almost has to admire the Tories' chutzpah; is trying to convince voters who are worse off (and are all too aware of that fact) that they're actually better off really smart politics? On 5 Live this morning, Robert Halfon, the blue collar moderniser, who has pushed harder than any other Tory for an increase in the minimum wage, tellingly chose not to adopt this tack. 

Rather than trying to fix the figures to justify their policies, the Tories would be wise to fix their policies to change the figures. 

David Cameron leaves 10 Downing Street on January 22, 2014. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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The Manchester attack will define this election: Broadcasters have a careful line to tread

It's right that the government should be given a chance to respond, but they must not be allowed to use it to campaign.

Every election campaign has its story, its place in the political history of this country. 2017 will forever be known for Manchester and the horror of the attack on Britain's young; and fighting terrorism will be a theme, overt or underlying, of what we see and hear between now and polling day.

The broadcasters have covered the events comprehensively yet sensitively. But they are aware that we're in an election campaign too; and when other news drives aside the carefully-balanced campaign formats, ministerial appearances give them a dilemma.

The fact is that what the Prime Minister and Home Secretary are doing in response to Manchester is newsworthy. It was Theresa May's duty to implement the recommendations of her security advisers on the elevation of the terror alert, and it would have been unthinkable for the news channels not to broadcast her various statements.

But it is also true that, if the bomb hadn't been detonated, Tuesday would have been a day in which the PM would have been under relentless damaging scrutiny for her u-turn on social care. All the opposition parties would have been in full cry across the airwaves. Yet in the tragic circumstances we found ourselves, nobody could argue that Downing Street appearances on the terror attack should prompt equal airtime for everyone from Labour to Plaid Cymru.

There are precedents for ministers needing to step out of their party roles during a campaign, and not be counted against the stopwatch balance of coverage. Irish terrorism was a factor in previous elections and the PM or Northern Ireland secretary were able to speak on behalf of the UK government. It applied to the foot and mouth epidemic that was occupying ministers' time in 2001. Prime ministers have gone to foreign meetings before, too. Mrs Thatcher went to an economic summit in photogenic Venice with her soulmate Ronald Reagan three days before the 1987 election, to the irritation of Neil Kinnock.

There are plenty of critics who will be vigilant about any quest for party advantage in the way that Theresa May and Amber Rudd now make their TV and radio appearances; and it’s inevitable that a party arguing that it offers strength and stability will not object to being judged against these criteria in extreme and distressing times.

So it's necessary for both broadcasters and politicians to be careful, and there are some fine judgements to be made. For instance, it was completely justifiable to interview Amber Rudd about the latest information from Manchester and her annoyance with American intelligence leaks. I was less comfortable with her being asked in the same interview about the Prevent strategy, and with her response that actions would follow "after June", which edges into party territory and would be a legitimate area to seek an opposition response.

When the campaigning resumes, these challenges become even greater. Deciding when the Prime Minister is speaking for the government and nation, or when she is leader of the Conservative Party, will never be black and white. But I would expect to see the broadcast bulletins trying to draw clearer lines about what is a political report and what is the latest from Manchester or from G7. They must also resist any efforts to time ministerial pronouncements with what's convenient for the party strategists' campaign grid.

There might also usefully be more effort to report straight what the parties are saying in the final days, with less spin and tactical analysis from the correspondents. The narrative of this election has been changed by tragedy, and the best response is to let the politicians and the public engage as directly as possible in deciding what direction the nation should now take.

Roger Mosey is the Master of Selwyn College, Cambridge. He was formerly editorial director and the director of London 2012 at the BBC.

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