Socialist Worker

Tory cuts mean that life is far harder than a decade ago

The economic crisis is pushing up prices while cutting workers’ wages, Sadie Robinson reports

Published Tue 7 Aug 2012
Issue No. 2315

Workers are poorer today than they were a decade ago. That’s the shocking finding from an Office for National Statistics (ONS) report last week.

It found that people in Britain had, on average, a disposable income of £3,640 for the first quarter of this year. Disposable income is the amount of money people have left after paying their personal taxes.

In 2003 the equivalent figure was £3,645. So people today have less to spend than they did during any quarter since 2003.

The figures show how the recession has hammered ordinary people. Wage cuts and freezes make it increasingly hard for people to make ends meet. Meanwhile prices have shot up—by 3.7 percent in 2010 and by 4.5 percent in 2011.

This has pushed up the cost of living, which hits the poorest the hardest. Household expenditure rose by 4.6 percent in 2010 and again by a further 3.2 percent in 2011.

So it’s little wonder that more and more people can’t survive on their wages alone. The Unite union has found that some 67 percent of workers are borrowing money to pay for necessities such as food and rent.

» Recession or no recession, the bosses take the cash

Its research found that wages tend to run out after 21 days of the month—and that workers borrow to get to their next pay day. Some 30?percent have cut back on spending on food to pay for other essentials.

People are cutting back on minor expenses too. The Joseph Rowntree Foundation has found that people have reduced the amounts they spend on Christmas and birthday presents.

On average they now spend £15 on a present for their partner today, compared to £50 in 2008. An increasing number of parents take their children swimming once a month instead of once a week.

They also use cheap “stay and play” sessions instead of paying for access to soft play centres. Pensioners look for “early bird” and “two for one” deals to spend less on eating out.

Families allocated £20 a month for eating out or takeaway meals in 2008. Today they will spend £30 around three times a year—a drop of nearly two thirds.

“The gap between the incomes and needs of the worst-off households is widening, especially for families with children,” the Rowntree report says.

It warns that the incomes of the poorest are so stretched that they are increasingly vulnerable to even small cuts in benefits or services.


£16,400 a year for a good life

The Joseph Rowntree Foundation says a single person needs to earn at least £16,400 a year before tax to have a minimum acceptable standard of living. A couple with two children needs to earn at least £18,400 each.

Attacks on wages make it harder for ordinary people to reach these income levels. Workers on the minimum wage—or those out of work—have no chance of reaching them.


Super-rich get super-richer

The richest 1,000 people in Britain are now worth a record £414 billion. That’s 5 percent more than they totalled last year. There are a record 77 billionaires on the 2012 rich list—two more than the previous record of 75 in 2008.

The threshold to join the 1,000 richest people in Britain is also up—by £2 million. Fat cats need at least £72 million to appear on the list.


Tories widen the wealth gap

Tory cuts are widening the gap between the rich and the rest of us, according to a Joseph Rowntree Foundation report.

Some 3.3 million children will be living in poverty by 2020—almost one in every four. And some 7.5 million working age adults will be living in poverty, as opposed to 5.7 million today, the report adds.


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Background Check
Tue 7 Aug 2012, 18:14 BST
Issue No. 2315
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