Middle Britain family faces £4,600 living standards gap by 2013

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date: 9 September 2011

embargo: for immediate release

Wages failing to keep up with inflation, tax and benefit changes and cuts in public services will reduce the living standards of a typical middle Britain family by more than £4,600 by 2013, according to a new TUC analysis published today (Friday) in the run up to its annual Congress next week.

In Unhappy Families, the first analysis of this living standards gap, the TUC has constructed four typical families. Their living standards are set to be hit by between six and ten per cent.

The analysis finds that:

  • an average income two earner family, living in the East Midlands with two children, will face a living standards gap of £2,000 this year - and a gap of £4,600 by the end of 2013
  • an average income single parent, living in London with two children, will lose the most (10 per cent of their salary)
  • a high income two earner family, living in the South East with three children, will lose the least (six per cent of their pay).

Living standards have fallen more than at any time since the 1970s and the Governor of the Bank of England told the House of Commons Treasury Select Committee in March that 'I am surprised that the degree of anger hasn't been greater than it has been.'

TUC General Secretary Brendan Barber said: 'People should be angry at the effect that the crash and government policies are having on living standards.

'The wrong people are paying the price for what went wrong over thirty years and the coalition's naive belief that they can put right the damage in just four years.

'As experts worry about a double-dip recession it is time to change course to invest in jobs, growth and getting the economy moving. This is the only sure way to repair the damage done by the crash.'

The TUC research:

  • assumes that wages will go up in line with the government's projections
  • takes into account the likely effects of RPI inflation, again using government projections
  • allows for the increase in personal tax allowances, but takes into account changes to tax credits and child benefits
  • uses a well-established model to work out the value of the public services used by each family that will be cut.

NOTES TO EDITORS:

Living standards gap by 2012/13

Annual earnings

House-hold

income

decile

Employ-ment status

Children

Region

Housing tenure

Living standards gap by 2013

Loss as per cent of earnings

Mike and Jenny

£37,740

5

Father: ft

Mother: pt

2

East Midlands

Mortgage

-£4,629

-6.2

Anisha

£31,620

5

Mother :ft

2

London

Rents

-£6,271

-10.0

Graham and Sally

£16,320

3

Father: ft

Mother: job seeker

1

North West

Rents

-£1,996

-6.2

Paul and Deborah

£85,680

8

Father: ft

Mother: ft

3

South East

Mortgage

-£10,295

-6.1

- Unhappy Families is available at www.tuc.org.uk/tucfiles/75/UnhappyFamilies.doc

- Graphics that illustrate the families and their losses are available at http://www.tuc.org.uk/tucfiles/78/BB_Press_Conf.pptx

- The TUC used the model developed by Howard Reed and Tim Horton to work out the likely negative impact on living standards of cuts in public services on each of the households. This is based on the most detailed analysis to date of spending on public services and how different people benefit. The details are explained in www.tuc.org.uk/extras/wherethemoneygoes.pdf

NOTES TO EDITORS:

- All TUC press releases can be found at www.tuc.org.uk

- Congress 2011 will be held at the TUC's Congress House in central London this year. The event runs over three days from Monday 12 to Wednesday 14 September. The deadline for free media accreditation has now passed. Media passes may still be processed but may to be subject to delay. ALL applications for media passes now cost £50. You can apply online by visiting www.tuc.org.uk/the_tuc/tuc-19831-f0.cfm Wi-fi will be available free of charge throughout Congress House during the conference.

Contacts:

Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Elly Gibson T: 020 7467 1337 M: 07900 910624 E: egibson@tuc.org.uk

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