A single mother on the National Living Wage, with two children, who’s renting, will actually be £1,600 better off this year compared to last year because of these cumulative changes.
Your numbers are literally made up.
On Question Time on 12 May, the Attorney General, Suella Braverman, described a specific type of household which she said would be £1,600 better off this year.
Another panellist, Dr Miatta Fahnbulleh of the New Economics Foundation, disputed this, with their disagreement reported by the Mirror, Huffington Post and Yahoo News.
From the context of the clip, it isn’t entirely clear what Ms Braverman meant, and she has not answered Full Fact’s questions about it or explained how the figure she gave was calculated.
But Ms Braverman may have been using a figure previously cited by the Chancellor that refers to the effect of recent government policy on someone’s income. In other words, it does not seem to describe how much better or worse off a single mother is overall this year than last, but how much better off she is than she otherwise would be without some recent changes to tax and government support.
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What did Ms Braverman say?
Ms Braverman described the government’s measures that she said would help low-income families during the cost of living crisis.
She said: “Whether it is raising the National Living Wage, whether it’s the Household Support Fund, whether it’s the £150 rebate to help with energy bills, whether it’s the cut and the freeze to fuel duty, these things all add up. Thousands of pounds can be saved by the average family. A single mother on the National Living Wage, with two children, who’s renting, will actually be £1,600 better off this year compared to last year because of these cumulative changes.”
The presenter, Fiona Bruce, challenged this by asking: “Even with inflation running at up to 10%?”
Ms Braverman replied: “No, the reality is, we are taking into account inflation, and these changes account for inflation.”
Going only on what she said on Question Time, it’s hard to know whether Ms Braverman meant that the mother would be better off overall in 2022, compared with 2021—or whether she meant that the mother would be better off than she would have been as a result of changes to tax and government support, but perhaps still worse off overall.
Ms Bruce seemed to think it was an overall comparison between the years when she challenged the comment with a question about high inflation in 2022. And Ms Braverman seemed to acknowledge that this was the right interpretation, by answering that inflation was taken into account.
Dr Fahnbulleh also seemed to understand the figure in this way, because she responded later by saying: “When you [tot] up all the measures the government has put in place, families, on average, are still £1,100 worse off. So your numbers are literally made up.”
This was also how Yahoo News and the Mirror seemed to understand Ms Braverman’s comments, because they said the figure represented the amount this mother would be worse off “despite” the cost of living crisis.
Where could the £1,600 figure have come from?
We have asked Ms Braverman three times for the source of the figure she gave. At the time of writing, she has not responded. That means we can’t say for sure what her figure was based on or how reliable it is.
However, Ms Braverman’s figure may be the same one that was used in Parliament by the Chancellor, Rishi Sunak, during the debate on the Spring Statement on 23 March.
Mr Sunak said: “By increasing the National Living Wage in April by 6.6%, by cutting the [Universal Credit] taper rate and through the increase in personal thresholds today, we have ensured—if we take all tax and welfare changes together—that a single mother of two children working full time on the National Living Wage will now be £1,600 better off.”
Mr Sunak did not specify that the mother in his example was renting, as Ms Braverman did, and he did specify that the mother was working full-time, which Ms Braverman did not. He also referred to Universal Credit, which she didn’t. However, in other respects it seems to be a similar figure.
We asked the Treasury how Mr Sunak’s figure was calculated. It told us:
“A low-earning family (one adult working 35 hours at the [National Living Wage], with two children over 5) is expected to be £150 a year better off due to the increase in the [National Insurance contributions] Primary Threshold. This family will already have benefitted from recent policy decisions: the [National Insurance contributions] change, [Universal Credit] taper rate and work allowance changes, increase in the National Living Wage (from £8.91 to £9.50), and change in the Health and Social Care Levy (12% to 13.25%) add a total of £1,610 a year to their net income.”
Confusingly, this explanation doesn’t quite match Mr Sunak’s claim that the figure included “all tax and welfare changes together”. It’s not entirely clear, for instance, if the figure includes the £150 rebate to help with energy bills or the fuel duty cut which Ms Braverman also mentioned, which means it remains uncertain if Ms Braverman really was using the Treasury’s calculation. However, if she was, then it does not represent how much better off the mother will be overall this year, and instead only looks at the impact of certain government changes to tax, benefits and the National Living Wage. It does not factor in rising costs more generally and does not appear to account for inflation, despite Ms Braverman appearing to suggest it did on Question Time.
It’s also unclear exactly what time period the figure is supposed to cover. While the list of changes factored into the Treasury’s calculation includes a number of measures introduced in recent months, it does not appear to include the loss of the £20 per week uplift in Universal Credit, which took effect early in October 2021.
Ultimately because Ms Braverman has not responded to questions about the figure she used, it’s impossible to say for sure what it was supposed to represent. Ministers who make specific claims about the impact of government policies should be prepared to back up their claims with evidence, and explain their calculations—particularly where the claim has resulted in confusion, as has happened in this case.
How much worse off will people be in 2022?
The cost of living crisis is causing a significant fall in living standards for many households across the country, but it will affect different households in different ways.
Rough estimates using the most recent official forecasts from the Office for Budget Responsibility and the Bank of England suggest the average household may suffer a loss of about £800-£1,200 in disposable income this year, depending on the methodology used. These figures are based on uncertain forecasts however. Other estimates may vary, and future estimates may be different when new evidence arrives.
We are not able to give a specific estimate for how much better or worse off overall the mother described by Ms Braverman is expected to be in 2022.
One analysis in March following the Spring Statement by the Institute for Fiscal Studies (IFS) found that “a lone parent homeowner with 2 children” working full-time on the National Living Wage and receiving Universal Credit would see a reduction in their real take-home income of about £520 this year, compared with last year. (This example differs from Ms Braverman’s, in which the mother is renting.)
The IFS analysis also suggests that a single person working full-time on the National Living Wage, but not receiving benefits, would overall be slightly better off this year, even when factoring in inflationary price rises for things such as food and energy.
Another March analysis, by the Resolution Foundation, found that a single parent with one child, working 20 hours per week at a low-medium wage, and renting, would experience a £584 fall in their annual income between September 2021 and September 2022. (This example differs from Ms Braverman’s, in which the mother has two children and it appears she works 35 hours a week on the National Living Wage.)