How the poor have been hit hardest by inflation

New data shows that the cost of essentials such as food and energy has increased most rapidly over the last five years.

It’s hardly news that the incomes of poorer families have been squeezed until the pips squeak. Declining real wages, underemployment and cuts to social security have all combined to drive down the living standards of those at the bottom of the income distribution in recent years. But low-incomes families have had to contend with another downward pressure that until yesterday we may have intuited, but hadn’t yet seen fully evidenced.

Now we know for sure that poorer families have experienced higher levels of inflation than the better off and, indeed, the average, since the recession began. Analysis published yesterday by the Institute for Fiscal Studies ably demonstrates this by taking the price rises of various goods in recent years and then putting these together with information about which items are more or less readily consumed by different income groups.

Unsurprisingly, it shows that the cost of essentials such as food and energy have increased rapidly over the last five years (at about 30 per cent and just under 60 per cent respectively). The same is true for others key goods such as transport and education, while the costs of some items such as mortgage interest payments have drifted steadily downwards over the same period.

Since a lower income family’s consumption basket is full of the basics, these trends have hit the poorest hard. In fact, the IFS estimates that those on lower incomes have experienced average price rises that are 7.1 per cent higher than those of the top income quintile since 2007/8. As a result, poorer families’ living standards have been depressed more than accounts that use an average inflation figure might suggest. Likewise, the squeeze on those in higher income brackets is overstated by the standard methodology.

In fact, this exercise still doesn’t give us a full picture of how low-income families are being pinched hard by prices. As the IFS makes clear, its analysis does not capture the way that the same good can cost more or less for different types of consumers – the "poverty premium" effect well documented in a report last year from the Joseph Rowntree Foundation. Poorer families are doubly disadvantaged then: the items they consume in quantity have gone up in price quicker than other goods in recent years, and they often have to pay more than their better off peers for these basics too.

But what are the political implications of all this? For a start, this new analysis undermines the claim that poorer groups have had an easier ride than others during the recession because benefits – a largish part of their incomes – lost less of their real value than earnings. And looking forward, it shows the government is significantly underplaying the impact on poorer households of its 2012 decision to uprate most key benefits at a sub-inflation 1 per cent for three years.

All in all, if you are poor, the cost of living conversation just acquired a new and sharper edge.  

A boy walks through the Heygate Estate in the Walworth area on April 24, 2013 in London. Photograph: Getty Images.

Lindsay Judge is senior policy and research officer for the Child Poverty Action Group.

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In the 1980s, I went to a rally where Labour Party speakers shared the stage with men in balaclavas

The links between the Labour left and Irish republicanism are worth investigating.

A spat between Jeremy Corbyn’s henchfolk and Conor McGinn, the MP for St Helens North, caught my ear the other evening. McGinn was a guest on BBC Radio 4’s Westminster Hour, and he obligingly revisited the brouhaha for the listeners at home. Apparently, following an interview in May, in which McGinn called for Corbyn to “reach out beyond his comfort zone”, he was first threatened obliquely with the sack, then asked for a retraction (which he refused to give) and finally learned – from someone in the whips’ office – that his party leader was considering phoning up McGinn’s father to whip the errant whipper-in into line. On the programme, McGinn said: “The modus operandi that he [Corbyn] and the people around him were trying to do [sic], involving my family, was to isolate and ostracise me from them and from the community I am very proud to come from – which is an Irish nationalist community in south Armagh.”

Needless to say, the Labour leader’s office has continued to deny any such thing, but while we may nurture some suspicions about his behaviour, McGinn was also indulging in a little airbrushing when he described south Armagh as an “Irish ­nationalist community”. In the most recent elections, Newry and Armagh returned three Sinn Fein members to the Northern Ireland Assembly (as against one Social Democratic and Labour Party member) and one Sinn Fein MP to Westminster. When I last looked, Sinn Fein was still a republican, rather than a nationalist, party – something that McGinn should only be too well aware of, as the paternal hand that was putatively to have been lain on him belongs to Pat McGinn, the former Sinn Fein mayor of Newry and Armagh.

According to the Irish News, a “close friend” of the McGinns poured this cold water on the mini-conflagration: “Anybody who knows the McGinn family knows that Pat is very proud of Conor and that they remain very close.” The friend went on to opine: “He [Pat McGinn] found the whole notion of Corbyn phoning him totally ridiculous – as if Pat is going to criticise his son to save Jeremy Corbyn’s face. They would laugh about it were it not so sinister.”

“Sinister” does seem the mot juste. McGinn, Jr grew up in Bessbrook during the Troubles. I visited the village in the early 1990s on assignment. The skies were full of the chattering of British army Chinooks, and there were fake road signs in the hedgerows bearing pictograms of rifles and captioned: “Sniper at work”. South Armagh had been known for years as “bandit country”. There were army watchtowers standing sentinel in the dinky, green fields and checkpoints everywhere, manned by some of the thousands of the troops who had been deployed to fight what was, in effect, a low-level counter-insurgency war. Nationalist community, my foot.

What lies beneath the Corbyn-McGinn spat is the queered problematics of the ­relationship between the far left wing of the Labour Party and physical-force Irish republicanism. I also recall, during the hunger strikes of the early 1980s, going to a “Smash the H-Blocks” rally in Kilburn, north London, at which Labour Party speakers shared the stage with representatives from Sinn Fein, some of whom wore balaclavas and dark glasses to evade the telephoto lenses of the Met’s anti-terrorist squad.

The shape-shifting relationship between the “political wing” of the IRA and the men with sniper rifles in the south Armagh bocage was always of the essence of the conflict, allowing both sides a convenient fiction around which to posture publicly and privately negotiate. In choosing to appear on platforms with people who might or might not be terrorists, Labour leftists also sprinkled a little of their stardust on themselves: the “stardust” being the implication that they, too, under the right circumstances, might be capable of violence in pursuit of their political ends.

On the far right of British politics, Her Majesty’s Government and its apparatus are referred to derisively as “state”. There were various attempts in the 1970s and 1980s by far-right groupuscules to link up with the Ulster Freedom Fighters and other loyalist paramilitary organisations in their battle against “state”. All foundered on the obvious incompetence of the fascists. The situation on the far left was different. The socialist credentials of Sinn Fein/IRA were too threadbare for genuine expressions of solidarity, but there was a sort of tacit confidence-and-supply arrangement between these factions. The Labour far left provided the republicans with the confidence that, should an appropriately radical government be elected to Westminster, “state” would withdraw from Northern Ireland. What the republicans did for the mainland militants was to cloak them in their penumbra of darkness: without needing to call down on themselves the armed might of “state”, they could imply that they were willing to take it on, should the opportunity arise.

I don’t for a second believe that Corbyn was summoning up these ghosts of the insurrectionary dead when he either did or did not threaten to phone McGinn, Sr. But his supporters need to ask themselves what they’re getting into. Their leader, if he was to have remained true to the positions that he has espoused over many years, should have refused to sit as privy counsellor upon assuming his party office, and refused all the other mummery associated with the monarchical “state”. That he didn’t do so was surely a strategic decision. Such a position would make him utterly unelectable.

The snipers may not be at work in south Armagh just now – but there are rifles out there that could yet be dug up. I wouldn’t be surprised if some in Sinn Fein knew where they are, but one thing’s for certain: Corbyn hasn’t got a clue, bloody or otherwise. 

Will Self is an author and journalist. His books include Umbrella, Shark, The Book of Dave and The Butt. He writes the Madness of Crowds and Real Meals columns for the New Statesman.

This article first appeared in the 25 August 2016 issue of the New Statesman, Cameron: the legacy of a loser