IMPACT OF THE DROP INCOMES IS OVERSTATED AT THE TOP AND UNDERSTATED AT THE BOTTOM
Larry Elliott’s business analysis (Living standards, 18 March) follows
the conventional wisdom of all macro-economic commentators by focusing
on incomes before housing costs have been deducted.
That way the impact of the drop in incomes is overstated at the top and understated at the bottom.
is no shock horror in learning that the top 10% of the income
distribution has fared worst of all with a decline of 9% between 2010
and 2013. Their property has leapt in value and their income after
housing costs is still in the millions – not exactly a clobbering.
the bottom 10% a drop of 5% before housing cost turns into a disaster
for millions of tenants after housing costs have been deducted.
The disconnect between the poverty debate and reality in the UK will
continue until the Institute for Fiscal Studies, and other independent
analysts, provide robust micro-economic data about the dire cumulative
impact of benefit caps and cuts, and the imposition of council tax and
its enforcement, on the incomes after housing costs, needed for food,
utilities, clothes and transport, in work and unemployment, since the
April 2013 implementation of so-called welfare reform.