The minimum standard of living in the UK in 2010
Posted by Christie Malry on July 7, 2010 at 11:24 am
There are people over at t'Guardian's CIF who seem to believe that I am somewhere to the right of Genghis Khan. And, you know me - I hate to disappoint - so it's with some sadness that I read the media coverage of a story about how much money you need to be able to participate in society in the UK. And it has sparked coverage like this:
A single person in Britain needs a gross income of at least £14,400 in 2010 for a minimum acceptable standard of living, says the Joseph Rowntree Foundation (JRF).
A couple with two children needs at least £29,200, the JRF added, in a research report which aims to show "what ordinary members of the public think is needed - not just to survive but to take part in society".
Remarkably, for figures so divorced from reality, there's not a Ritchie to be seen. These figures come from a report from the Joseph Rowntree Foundation and written by three academics from Loughborough University, entitled "A minimum income standard for the UK in 2010."
First up, it's not immediately clear how these figures tie up to the headline £14,400 and £29,200. Looking at the couple with two children, they apparently "need" £673.08 per week, which works out at an income (after income tax but before council tax and VAT) of £35,000 per year, or about £50,000 or so jointly pre-tax.
I say "need" deliberately. Because these figures are used by the JRF, on a "net of rent, council tax and childcare" basis to beat up honest middle class taxpayers, because they go on to compare these levels of income with benefits as if to point out that it's all our fault that these people don't have enough to participate in society with. And, meantime, I'm pondering whether the time to participate in society wasn't back when they were at school...
If it's a comparison against benefits we're going for, then we need to do a line-by-line assessment against reality:
- Food. £107.13 a week is complete nonsense. My family of two adults plus two children lives an idyllic middle class existence on £80 a week. Saving: £27.13 a week.
- Alcohol. £6.49 a week. Errrr, I don't think so. If you're asking other people to hand over their hard-earned cash to you, you can drink tap water. If you want alcohol, you'll have to earn your own money, thank you very much. Saving: £6.49 a week.
- Personal goods and services. £29.20 a week. Again, if you want to spend on yourself, you can earn it yourself. Incidentally, our 'food' budget includes all 'personal goods' spending too, so the benefit recipient doesn't need this as well. Saving: £29.20 a week.
- Other travel costs. £39.38 a week. Again, we spend about £25 a week for both our travel cards, so this looks very much overbaked. Apparently the MIS includes taxis, which sounds very extravagant for people who are supposed to be living on other people's charity. Saving: £14.38 a week.
- Social and cultural participation. £104.73 a week. I do get this one. You have to have some money to spend on yourself. But there's no way on this earth that you can justify £104.73 a week. About £10 a week sounds more like it, for a saving of £94.73 a week.
The JRF "benefits-like" MIS is £381.17 a week. Our savings, which total £171.93 per week, bring the MIS down to £209.24 per week. Considering that Income Support, Child Benefit and Child Tax Credit actually total £235.29 per week, this means that our benefit claimants are actually receiving over £25 a week, or some 12%, more than the rebased MIS.
Given that the state demands money from taxpayers on threat of prison, it is axiomatic that the amount paid in benefits truly reflects a fair minimum to participate in society. The JRF figures are grossly overinflated, leading to an unrealistic expectation of the amount of benefit that society should fund. In line with the general perception that benefits already act as a disincentive to work, my adjustments serve to show that they could be cut and still leave enough for people to participate actively in society.
PS: I had a good laugh at the childcare figure of £199 a week. WTF? Where do these people do their childcare... Eton?
Do note that the JRF figures are pre tax.
Also, that they're not about benefit levels. They're about "what income do you need not to be poor".
So, take the 14.4 k, whack off tax and NI and then see what hourly wage you need at 40 hours a week 52 weeks a year to not be poor.....the current minimum wage.
The true story of this number is that no one working would be poor if only the poor didn't pay income tax and NI.
Oh, but they do compare the amounts quoted to current benefit levels. I
don't think that's a valid comparison; you'd end up with a different set of
answers if you were to ask \"How much is it valid to take from taxpayers to
hand over to people who currently do nothing, so that latter group can
survive?\" In my view, the report would have had more moral authority if it
had left the benefits comparison out.
I sort of agree on the tax/NI on the poor point, although we need to take
care that we don't erode the tax base so far that essential services that
really are used by all (e.g. hospitals, arguably schools) end up being paid
for by an ever-shrinking band of taxpayers. Philosophically speaking,
things that everybody uses should be paid for by everybody. If not
everybody can afford it, then you should consider ordering rather less from
the menu.
And I suspect nobody would mind, or have any difficulty, paying tax (incl.
NI) if it were only, say, 15% of income.
[...] by Christie Malry on July 9, 2010 at 11:07 am A comment from Tim Worstall has got me pondering the article I wrote the other day about the JRF's report on the minimum [...]
I don't about any one else, but I'm a single working person and I've never found accommodation of £50 a week. These accommodation figures are way out of line with the majority of the country. I'd say they're a least double this on average.