Duncan’s Economic Blog

What it’s all about…

Posted in Uncategorized by duncanseconomicblog on March 19, 2009

I just came across this link on Out of Range.

By midday on Wednesday, Louise Spencer has £6.80 left in her purse to last until Monday, which works out at £1.36 a day to pay for anything she and her two small children might need. She is confident that she will make the money stretch. It’s just a question of careful budgeting.
Frugality is an art she has already perfected. This morning she has done the weekly shop, which came in 67p cheaper than the £20 she had set aside. Providing a week’s worth of meals for three people for £6.66 a head is easy once you work out how, she says. The gas and electricity payments for the week have already been made, so she knows the children will be warm. The only thing to fear is the unexpected – a broken pushchair, a request to buy her daughter’s class photograph.
Louise, 24, doesn’t smoke, drink or take drugs and she very rarely goes out with her friends. She spends pretty much all the money she gets in benefits on her children. She rejects the suggestion that her family might be described as poor. “Oh no,” she says firmly. “We get by.”

For God’s sake, surely this is the issue? And much as I might rant on about deflation/regulation/fiscal stimulus the final measure of our worth is whether or not we help people in similar situations?

9 Responses

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  1. VinoS said, on March 19, 2009 at 5:24 pm

    Indeed. Well-said, Duncan. It does always astound me when right-wingers claim that people are living the life of Reiley on the dole. I bet you most of them have never tried to survive on £60pw [the JSA for a single person] or to support a couple of kids on an income of around £150pw.

  2. jdc said, on March 19, 2009 at 9:15 pm

    Yes. How much has she been helped by the VAT cut and lower interest rates, then? What will government’s actions to boost the stock market and house prices achieve for her?

    • duncanseconomicblog said, on March 19, 2009 at 11:02 pm

      Precisely, although a fiscal stimulus involving rises in JSA would help.

  3. Antonia said, on March 20, 2009 at 12:38 am

    Seconded, jdc. What would that £12bn put into tax credits, benefits and child benefit have done for this family, and thousands more?

    • jdc said, on March 20, 2009 at 8:29 am

      That and more besides, Antonia. What would the 25% interest-free loans the government gives to “needy first time buyers” earning up to £60,000 to buy overvalued new build flats achieve, if it and the marketing budget that crams the London press full of adverts saying “time to buy” a £250k poky 2-bed flat in Clapton achieve, if it was diverted into building publicly-owned housing for a combination of market and affordable rent? Creating jobs, homes, and a future income-stream for Government.

      I am so fed up of it all.

  4. Tim Worstall said, on March 20, 2009 at 12:56 pm

    Well, it would have been better if the journalist doing the reporting had been a little more careful with hte numbers. Like, err, not understating the amount the woman received. Or overstating the amount being paid to the BBC licence.

    Or even noting this:

    “Right. Lets clear a couple of things up, shall we?

    The article states Louise gets £169 a week, or £676 a month tax free: she gets income support, tax credits and child benefit (CB: £33 a week). She will pay no rent or council tax if she is on income support. Seeing as to pay an average rent for where she does, she would be looking at £400 a month with £80-ish quid council tax.

    So really her benefits package is actually worth about £1156 a month or the equivalent of a £17K a year salary.

    That’s more than a band 2 full time GP receptionist would earn a year.

    The woman is not ‘poor’; the reason why she lives as she does is because she is stupid.”

    (from the comments section).

    Sure, I agree, something like £17 k a year pre tax isn’t the life of Riley. But how buggery much do you think someone who is unemployed should get?

    • thelocalgovernmentofficer said, on March 20, 2009 at 2:43 pm

      That’s slightly misleading – a GP receptionist working full time with two dependent children, and earning £17k a year would receive a further £95 a week in tax credits, and depending where they lived might get some housing benefit as well.

      You might argue about whether they should be getting that, but it means they would in fact be substantially better off than Louise, getting at least £1500 a month.

  5. yorksranter said, on March 22, 2009 at 10:30 pm

    It’s Worstall, of course it’s misleading. Not that long ago, 20% of my post-tax income (i.e. my income – strange how the hammer of tax cuts quotes pre-tax figures when it suits him) went on getting to work. I suppose I should have moved the office.

  6. Tim Worstall said, on March 22, 2009 at 10:35 pm

    Alex…..try those literacy skills again would you? It’s a quote from a comment on the original article at CiF.

    And moving your office? No, but residence sounds reasonable.


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