Keir Starmer told Times Radio yesterday that “nobody feels better off now than they did 14 years ago”.
Let’s take a look.
It’s not clear whether the Labour leader has a specific measure of “feeling better off” in mind, though economists often look to “household disposable income” to track financial wellbeing.
This is the combined income of everyone in your home, including benefits and pensions – minus the amount you all pay in income tax, council tax and national insurance.
Analysis by the independent Institute for Fiscal Studies (IFS) using what is still the latest available data finds that – even when you take account of inflation, slow wage growth and housing costs – median household disposable income actually increased between 2010-11 and 2021-22.
In other words, the average household was better off in 2021-22 than at the start of the 2010s.
And it’s not just the average that improved. Another IFS research paper shows that household disposable income rose in every income percentile between 2011-12 and 2021-22.
That means that the very poorest households, those in the middle, and those at the top all saw their incomes increase over that period. And again, this accounts for changes to wages, benefits, rent, mortgages and inflation.
But it’s important to stress that these gains were small. For the very richest and very poorest, disposable income rose by less than 0.6 per cent each year on average. And the biggest winners (those in the middle) only saw a 1 per cent annual increase on average.
It’s possible that this might have changed – for better or worse – in the most recent financial year (2022-23). But that data won’t be published until March, so until then, we can only use what’s available.
While we’re here, it’s worth addressing a recent report by the Centre for Cities, which prompted headlines claiming the average Brit is “£10,000 poorer now than in 2010”.
What the headlines don’t always convey – though some of the articles do – is that this analysis doesn’t show we’re ten grand poorer than in 2010.
The “£10,000” figure is the difference between the average Brit’s current disposable income and what the Centre for Cities calculates they could have in their pocket if the economy had continued to grow at the rate it was in the 2000s during the 2010s.
In other words, the ten-grand difference is between what actually happened and a hypothetical alternative version of the last 14 years. Modelling alternative scenarios is something economists do all the time. But like any model, it relies on assumptions and calculations that are not infallible.
FactCheck verdict
Is Keir Starmer right to say that “nobody feels better off” than they did in 2010?
Recent polling by YouGov suggests Brits generally feel grim about the state of the country – with 75 per cent saying things are “much” or “somewhat” worse than they were then.
But the most reliable measure we have of people’s actual financial wellbeing shows that the vast majority of Brits were slightly better off in 2021-22 than they were in 2010.
It’s possible that could have changed – for better or worse – in the most recent financial year, but the data that would tell us either way has yet to be published.
The Labour Party was contacted for comment.
This article was updated on 8 February to clarify that household disposable incomes grew by an average of 0.6 and 1 per cent per year between 2011-12 and 2021-22, rather than 0.6 and 1 per cent over the whole ten-year period.
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