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UK living standards lag 2010 levels as election nears: think tank
[LONDON] British living standards remain below those before the last national election in 2010, a leading think tank said on Wednesday, putting Prime Minister David Cameron's economic record back in the spotlight ahead of May 7's election.
Living standards for people in the middle of the income distribution were 2 percent lower than before the last election, the non-partisan Institute for Fiscal Studies said.
But in better news for Cameron, living standards were about the same as in 2007, before the financial crisis, the IFS said.
The opposition Labour Party is blaming the Conservative-led coalition government for a "living standards crisis." The IFS said it would be wrong to blame any one political party for the weaknesses in British productivity and wages since the financial crisis.
"It would be misleading to attribute all trends in living standards that occurred before May 2010 to Labour and all trends thereafter to the coalition," the IFS said.
It said the recovery in living standards was far slower than after recessions in the 1980s and 1990s, reflecting weak wage growth, tax rises for top earners and cuts to welfare.
Finance minister George Osborne said the report laid to rest Labour's claims that there had been a sharp fall in living standards on his watch, and that the poor had been hit hardest by his efforts to cut borrowing.
"Britain is fundamentally in a better position than it was five years ago," he said.
But Labour said Mr Osborne's failure to improve living standards for working-age people undermined his claims.
"This is set to be the first time since the 1920s that people are worse off at the end of a parliament than at the start," said Labour legislator Cathy Jamieson.
The Conservatives and Labour are level in opinion polls. Voters say they trust the Conservatives more to run the economy but they also say Labour's policies are fairer.
A recent run of strong economic data has failed to give the Conservatives an overall lead.
The IFS said the fall in living standards had been similar for people with different incomes but young people had suffered much more than the over-60s who benefited from above-inflation increases in pensions and who are working longer than before.
The recovery in inflation-adjusted earnings has been much slower than in the past, it said. In the three years since incomes hit a low, they have risen by 1.8 per cent, compared with 9.2 per cent and 5.1 per cent after the 1980s and 1990s recessions.