The family couldn't, said the woman interviewed in the Guardian on Budget Day, manage without its tax credits: "We both work but we don't earn enough to live without our tax credits." Yet before tax credits existed, that is exactly what a similar family would have had to do. It's an example of what I call benefits creep, where you offer people something and they quickly become dependent on it. Standards get adjusted, extra children are born, expectations raised a little.
A foreign holiday once a year becomes normality, not a luxury. The food the family eats improves a little. Children get used to attending after-school clubs. What in the past was not even demanded becomes an essential part of the family budget.
It happened with the Education Maintenance Allowance (EMA). No one was demanding that children of 16-18 should be paid to remain in education, but once a benefit is established it becomes - as Michael Gove recently discovered - hard to cut. Some teenagers will genuinely be relying on it; others will have attended what they call "EMA courses" (never mind what the qualification is) just in order to get the money, at the behest of their parents.
So what does it mean to have "enough" money? It isn't a question that I see politicians addressing. The reason why the "anti-cuts" movement hasn't yet had a lot of purchase in Middle England beyond the public sector is that a lot of the things the Conservatives are cutting are projects that the "squeezed middle" finds less compelling than its tax credits. Roughly 6.3 million households claimed tax credits last year, costing £27.3bn. These households would rather see their tax credits protected than continue funding a university professor's pension or the advisory panel for the Local Innovation Awards Scheme.
The Joseph Rowntree Foundation (JRF) has an ongoing project - called the Minimum Income Standard (MIS) - to try to calculate how much income a household needs to maintain a basic standard of living. Each year, focus groups report back on what ordinary people consider the essentials for life. Last year, for instance, internet connection at home was included as part of "household services" for the first time. The current table is reproduced above. It shows some of the complexity of trying to calculate what a family "needs": the social and cultural budget includes, for instance, allowance for a one-week cheap holiday in the UK as well as money to go to the cinema occasionally.
There was a debate over the cost of heating, with the focus groups considering too high the expert views about how hot your home needs to be. The national Fuel Poverty Strategy demands 21°C in the living room and 18°C in other occupied rooms; personally I don't know anybody who heats their house to 21°C, not with the cost of oil as it is. The "squeezed middle" turns the heating off before it gives up swimming lessons for a child, or stops paying insurance on the family car.
The JRF acknowledged recently that it underestimated the cost of living for rural households and added up to £55 a week for private transport for families outside cities, to cover the cost of two cars per two-adult household (or £30 for one car). When you take into account insurance, depreciation, servicing, tax, parking costs, as well as fuel, running a car in fact costs far more than that.
The point is that your needs differ according to the lifestyle you lead. If you have chosen (and are able) to engage fully in society - to hold down a job, for instance, no matter how badly paid - then your costs rise. You must travel to work, possibly fund some childcare (not all of it covered by tax credits), have decent work clothing and a haircut. If you are working, you must pay your own rent or mortgage insurance, school meals (£800 for two children), music lessons (£400 for two kids, one instrument each), school trips, prescriptions, dentist, the optician. Is paying into a pension scheme essential? I would say so.
I calculated the weekly income after housing costs of an unemployed woman with two children, and an employed couple, also with two children of the same age (one at school, one pre-school). Same rent of £800 a month, same council tax. The unemployed woman receives £221 a week after rent, council tax and childcare - a slightly higher income than calculated as essential in the MIS. Her benefits add up to almost £22,000 a year.
Now look at this couple. He earns £18,000 a year and she works part-time, earning £10,000. They both put a little of their salary towards
a pension, not as much as they need to. They have extra childcare costs, not all of which are covered by tax credits. They need to run two cars to manage jobs and school runs. Their net income (including tax credits) would be about £280 a week after paying £60 a week petrol, which is not much in that situation. It is much lower than the MIS suggests, and remember that they will also pay for school meals, dentists and the rest, which the unemployed person does not pay. In other words, they are worse off - and they are relying on tax credits of more than £6,000 a year to survive.
Tax credits are the acceptable face of benefits in Middle Britain, plugging the gap between falling wages and the rising cost of living for working people. Those who claim them have little sympathy for those who do not work by choice and still get substantial benefits.
As I write this, a battle is raging on the New Statesman's website over what the Hyde Park anti-cuts march "meant". The NS blogger Dan Hodges appears to have infuriated many readers by pointing out that Middle England doesn't march. He's right. It probably couldn't even afford the train fare to London.