The lying of the right, again

The Times and Telegraph are desperate to smear Labour’s economic record, this time by lying that everyone got poorer last year.

The most egregious bit A bit comes from the Times: "The middle classes, whom Labour is desperate to court, were hardest hit between 2002/3 and 2003/4 by the tax changes. A single-earner couple on £40,000 with one child would have lost £117 per year — a loss of 0.4 per cent."

Someone in this bracket isn’t is middle class. They’re in the ninth seventh decile of disposable household income (assuming the child is aged 2-4 and council tax is £1000pa). This makes them rich upper-middle-class.

The Adam Smith Institute has a typically ignorant take on the whole study. Which reminds me to remind you to go here and vote for anyone but them.

Update: amended in line with Anthony’s comment. The spin on the article is dodgy (especially as the entire fall in income was accounted for by self-reported incomes of self-employed people; coupled with higher taxation, this suggests a rise in the black economy rather than a fall in income), but the example is reasonable.

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9 thoughts on “The lying of the right, again

  1. "They’re in the ninth decile of disposable household income"

    No they’re not. They’re in the seventh decline – you put their gross income (40000) in the calculator instead of their net income after income tax and NI payments have been deducted (about 29000 by my reckoning).

    Seventh decile might still not count as middle I suppose, it depends where you want to draw the line.

  2. The median income rose, so its probable that more people got richer than poorer. A redistributive government should be more concerned about the that than the mean, though obviously it is a harder measure to calculate.

  3. A government that wants to get re-elected probably doesn’t want to trumpet its success in shifting money from the voting classes to the non-voting classes though.

  4. According to the report, whatever redistribution has occurred over the last three years has produced no statistically significant effect on inequality. Britain is still a more unequal society now than it was in 1997.

  5. Actualy John having read the survey you’re right and the Times is speaking bollocks. The IFS breaks down the changes in mean income per quintile. From poorest to richest they are 1%, 1%, 0.5%, 0.5%, -0.9%.

    Thus it’s only true to say middle-class incomes fell if middle class is taken to mean ‘top quintile’. This is clearly nonsense.

  6. Yup, and because the top quintile earn a lot more than the other quintiles, the mean figure is going to exaggerate this appreciably. The median will certainly have risen.

    I guess this is partly connected to the misperception of your own income thing that Chris Bertram was talking about t’other day: Telegraph and Times staff writers probably *do* think that normal, middle-class people are concentrated around income levels that are actually associated with the top couple of deciles…

  7. how hard would it have been to combine it with one of these?

    Effing difficult, unfortunately, unless you’re going to restrict its usefulness to people who have no income other than PAYE earnings. I’m guessing from this that you’re not in the self-assessment classes?

    Also the IFS are, in my experience, the most horrifically punctilious and pedantic people on the planet. I would guess that the idea that an approximate, back-of-envelope calculation might be part of their website would cause actual physical pain to some of them. You ought to try discussing the difference between the "average marginal tax rate" and the "marginal average tax rate" for the UK and the uses and abuses of both. I think it was Scott Adams who coined the phrase "boredom can’t kill you, but you might wish it could".

  8. The Times is being even more slippery than I thought. The paragraph which says that "average household income after tax and benefits — £21,000 — fell by 0.2 per cent" is followed by the one John quotes, i.e "But the middle classes, whom Labour is desperate to court, were hardest hit between 2002/3 and 2003/4 by the tax changes. A single-earner couple on £40,000 with one child would have lost £117 per year — a loss of 0.4 per cent"

    I think this gives the impression that their incomes fell by 0.4%. The important bit is the ‘by the tax changes’. Their overall income probably rose by 0.5% (as their quintile’s did) if you include incomes and benefits.

    ps When can we do our self-assesmenets by? Having a stakeholder pension I get a largish rebate each year so I actively look forward to doing it. By the way for those who have trouble this website does it all for you, free,, including sending off to the IR.

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