Brian Monteith: Rich are getting poorer as poor become richer

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Lies, damned lies and statistics. It’s a common phrase uttered when inconvenient facts surface that expose some political sophistry to the scrutiny of hard, critical challenge. This week I rejoiced in the announcement that yet another collectivist myth has been put under the microscope and shown to be impotent if not sterile and absent of all life.

For, it happened, an item of news that contained so much urbane economic facts probably passed by 99.99 per cent of the British public – while they celebrated Andy Murray’s great victory at Wimbledon. Get this: the rich are getting poorer while the poor are getting richer.

Did that register? Let me repeat it, for it is contrary to the received wisdom of the day and what so many politicians are telling us: the poor are getting richer and the rich are getting poorer.

Now before I go on let me clarify two things. Firstly, the official facts released by the Office of National Statistics (ONS), that I am talking about, are averages and you, the reader, may not feel these facts reflect your own circumstances. Nevertheless the averages give an overall picture of what is happening – and despite what may be happening to you (and you could also be beating the trend positively) the truth is generally good for the poorest in British society.

Secondly, incomes are all relative and have to be seen in a historical context, so when we talk of people getting richer or poorer we also have to see it against where we were, say, 50 years ago, when my dad and grandad were both working and I was just starting school. And, guess what, the ONS also revealed this week that over the last 50 years original household income has risen year on year by an average of 1.8 per cent. In other words we’re all getting richer irrespective of what’s happening across society.

Now this may come as no surprise to you. You may not have facts and figures, averages or medians available to you but, hey, you often look out across the estate, be it country or council, and notice that even the poorest in society now have a jalopy, a satellite dish, a refrigerator and sundry other artefacts that our great grandparents could only dream of – or witness by watching a film like Metropolis in black and white (without sound).

Let me go further, I often work in Africa and Arabia and I see the same thing. People who we might consider poor consider themselves much richer than their parents ever were. They may live in very basic accommodation but it is wind and weathertight, has electricity and water, sanitation and, yes, a satellite dish and TV. There are more shopping malls – and of good quality – in Gaborone, Botswana, than in Glasgow.

So, taking these two points – about averages rather than the particular, and the relative nature of our overall improvement – into consideration we need to come back to what the hard facts mean in the here and now.

Firstly, when it comes to this age of austerity we are undoubtedly “All in it together”. The fall in income between 2007-8 and 2011-12 has been the largest for the richest 20 per cent – at 6.8 per cent – while the poorest 20 per cent have seen their income increase the most – at 6.9 per cent. And before you ask, this takes account of all taxes, benefits and inflation. Let me repeat, the rich are getting relatively poorer while the poor are getting relatively richer – while taking account of the other stats, everyone is on average getting richer.

For the critics of our mixed economy capitalism that we survive under, this must come as a rather sobering shock to their system, as it confirms what even they might admit to themselves in their quietest loneliest moments – capitalism works. It could work even better but that’s another column if the editor might permit.

Secondly, if this statistic is maintained – and, to be honest, that is by no means certain, such are the economic variables beyond the control of the present government – then there remains a possibility that once the public appreciates that the pain has indeed been shared Cameron, Osborne and Clegg may yet pull victory from the jaws of political defeat in 2015 and beat the hapless Ed Miliband. Why, Cameron may even win an outright majority!

I still think the latter outcome is unlikely, for no other reason than I believe our political elite are still too detached from the electorate and Ukip may yet deny Tories enough seats by letting Labour win where they otherwise would be thrown to the dogs.

Still, these statistics are good news for humanity and remind me of Margaret Thatcher humiliating Simon Hughes on her last day in the Commons when he attacked her on the need for greater equality – and she retorted she believed that everyone could get richer (and had) while he would rather have everyone poorer to make us the same. Not for the first or last time, the lady was right.