Rising Disposable Income: Fact Check

John Rentoul

dcpmqs 300x247 Rising Disposable Income: Fact Check David Cameron speaks more carefully than I thought. At Prime Minister’s Questions he said, in answer to Gareth Thomas (Labour):

Because this government has cut people’s taxes, because we are allowing people to keep £10,000 of what they earn before they pay taxes, disposable income went up last year, and it is rising as we speak today.

I immediately thought that he was wrong, because I had looked at the figures recently and thought that real disposable income per head had fallen since the election.

But it turns out that his words are just about consonant with the facts. Total real household disposable income (NRJR) went up 1.6 per cent from 2011 to 2012. And, although no one can know what is happening “as we speak today”, because the figures have not been compiled yet, the figures for the latest quarter, Q2 of this year, showed a rise over the previous quarter.

However, the most recent quarter is still 0.7 per cent lower than the same quarter the previous year.

What matters, though, is whether disposable income per head is now higher or lower than the level inherited from Labour. The figures I cited in my recent post were for “equivalised household disposable income” but went up only to the fiscal year 2011-12. The NRJR series is more recent, although it is not a per-head measure.

Update: For that, we need IHXZ, “real households’ disposable income per head”. And, because the quarterly numbers are erratic, we need to compare last whole year of Labour, Q3 2009 to Q2 2010, with the most recent year, to Q2 2013.

In that period, real households’ disposable income per head fell by 2.2 per cent.

Cameron is guilty of selecting statistics that give a misleading impression.

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  • chrishaines47

    Labour does not stop the rich being rich. It stops the poor being rich.

  • reformist lickspittle

    Yeah, ‘cos everybody has the “freedom” to dine at the Ritz don’t they??

  • chrishaines47

    Point take but I was poor under ZaNuLabour and I am poor under Camergoon. Before Blair I could at least take a photo of a chip shop in Kent without arrest. Plebgate = Tony’s 3500+ laws. IT IS FAR EASIER TO ESTABLISH A POLICE STATE THAN TO DISMANTLE ONE.

  • porkfright

    Very well put.

  • chrishaines47

    Even better put. In a weeks time a police corruption scandal will break that makes Tomlinson, de Menezes and the B*rmingham S*x look small. The Grauniad are assiduously courting me. Speaks volumes of The Job er I mean The Indy!

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