Is the Institute for Fiscal Studies on to something?

In a recent ‘Times’ article (republished on the IFS website)
Paul Johnson of the IFS  comments extensively on their recent report on UK living standards:

“..by far the biggest challenge to have reared its head over the past ten years or so … is the massive squeeze on incomes right across the population. After taking account of inflation, average earnings remain below where they were in 2008. That’s unique in at least 150 years.”

He continues:
“Increasing employment and dreadful earnings growth have put paid to another verity. Poverty is no longer overwhelmingly associated with lack of employment. The majority of those officially classified as poor live in a household where someone is in work. More than four in ten children in families where one parent works now fall below the poverty line.”
And further:
“Another profound change relates to what it means to be in the middle of the income distribution. The incomes of those in the middle are no further behind the top than they were 20 years ago. But today half of middle-income families with children live in a rented property. Less than a third did so in the mid 1990s. With the extension of in-work benefits they are also more reliant than before on welfare. In the mid-1990s both the rich and the middle were generally owner-occupiers dependent on their own earnings. Increasingly the renting, benefit-dependent middle earners have, and perhaps feel they have, more in common with the poor than with the rich.”

Although, as we have come to expect of the IFS, he goes off the rails at the end of the article, when he talks about tax revenues (that’s why I have quoted extensively to spare PP readers from having to read it throughout!) his comments are a pretty devastating critique of the current economic circumstances.

His conclusions suggest that Labour has an open goal on living standards. They also imply that the idea that you get more right wing as you age may, with so many still feeling the pinch for much longer, not be as pervasive as most imagined.

Labour’s remaining problem is Brexit on which they are giving mixed messages. A period of Labour silence would surely be advantageous in order to allow the Tories gradually to strangle themselves. It seems to be most unlikely that the government will be able to get its five Brexit bills through the Commons and Lords unscathed and it I would be unsurprising if the government fell at an early hurdle. Still, the longer the government lasts the clearer it will be that leaving the EU is a recipe for impoverishment of the nation and that will, by the day, be getting more obvious to voters. So when Labour seems to suggest that its Brexit policies will be practical and influenced by circumstances as they arise perhaps that is no bad thing.

Add to that the fact that Conservative voters are getting elderly and some will, like Brexit voters, be popping their clogs.

Time I think, is on Labour’s side.

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