8 factual errors by Polly Toynbee in our debate

Adam  Memon

by Adam Memon

On BBC News yesterday, I took part in a debate with Polly Toynbee on the latest GDP figures. Whilst at the CPS we don’t always agree with Polly’s stances, it was an absolute pleasure to meet her. She is a fair and formidable debater. Sometimes there are things we think she gets wrong. Here are 8 of them from yesterday’s debate.

1. “What we’re seeing is almost no change.”

It’s difficult to see how 5 consecutive quarters of growth can be described as almost no change. GDP is still 0.6% below the pre-crisis peak but that is from a 7.2% peak to trough fall and in Q1 2014, GDP was 3.1% higher than in Q1 2013. Manufacturing grew an excellent 1.3% in the first 3 months of the year and Services has seen growth of 0.5%, 0.7%, 0.8% and 0.9% over the last four quarters. The 1.5 million net new jobs since mid-2010 also rather speak for themselves.

2. “The whole economy has only got bigger because we’ve got more people.”

It’s true that population growth has meant that output has grown even faster than it might otherwise have done. However, that’s clearly not the whole story; the employment rate has increased to 72.6% which is the highest it has been since mid-2008, average weekly hours worked has increased to 32 hours from 31.5 hours and the inactivity rate has fallen to the lowest level since 1990. This means that not only do we have more people but those already in jobs are working more and many who had been stuck in the welfare trap are re-entering the labour market.

3. “For the great majority, they’ve had no increase at all.”

Total pay grew 1.7% in the year to February and CPI inflation for the year to March was 1.6%. However, private sector pay grew 2% and public sector pay grew 0.9%. February’s CPI inflation was 1.7% which means that even in February, most private sector workers will have seen real terms increases in wages. Whilst this is certainly not yet good enough, the ONS data points strongly to the fact that more workers will now have seen small real wage rises than those who haven’t.

4. “Take away the bankers bonuses and there is no increase.”

In the year to February, regular pay grew 1.4% and when including the impact on bonuses, total pay rose to 1.7%. So yes, bonuses have meant total pay growth is higher than CPI. However, the significant growth in bonuses is actually coming from Manufacturing and Construction with 12.8% and 10.2% growth over the last year. Bonuses in Finance grew by just 1.1%. Furthermore, the growth in regular pay for private sector workers was 1.8%. This means that even stripping out bonuses, regular pay in the private sector is growing in real terms.

5. “The people at the very top have done very well.”

The ONS shows that in 2009/10, the average original income of the richest 10% of households was £100,155 and this fell 1.07% to £99,088 in 2011/12. Post Tax income for the richest decile fell by 2.93%. This means that the richest are worse off in nominal terms and real terms in both their pre and post-tax incomes. As John Rentoul has pointed out, income inequality by a variety of measures has also fallen in recent years.

6. “The people at the bottom have lost out in every way.”

The ONS also shows that over the same time period, the poorest 10% of households has seen a 9.7% increase in original incomes and a 9.36% increase in post-tax incomes. Using the CPI inflation for April 2011 and April 2012, shows that for the available data, the poorest 10% have seen a real terms increase of £72 in their original incomes and a £92 real terms increase in their post-tax incomes. The poorest are better off since the election.

7. “The bottom 20% don’t have cars.”

This claim was in response to a point I made about fuel duty cuts. The ONS shows that in 2009/10, the poorest 20% of households paid £269 in fuel duty compared to £245 in 2011/12 (the last year for which data is available). This means that fuel duty fell from 5.7% of the original incomes of the poorest quintile to 4.5%. People in the lowest income brackets do in fact drive and fuel duty cuts have made it cheaper for them to do so.

8. Zero-hours contracts are “for most people a disaster.”

Zero-hour contracts are not for everybody but for many people they can provide a valuable flexibility. The ability to turn down hours when you’re busy can be incredibly helpful for students for example. Moreover, the CIPD finds that people on ZHCs are more likely to say that they are satisfied with their jobs than other workers; as well as to say that they are happier with their work-life balance. Calling ZHCs a disaster is simply wrong. 

 

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Comments

Sam Johnson - About 90 days ago

I just wanted to commend Mr Memon on his interview, and moreover, his detailed and excellent article here. Indeed, it is nice to see it so plainly proved that the left wingers are those with unfounded, bigoted opinions.

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Bill Quango MP - About 90 days ago

Only eight things factually wrong?
She's getting more accurate in her old age.

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Gareth Stone - About 89 days ago

Much as I despise Toynbee and her kind, CPI is not a sensible measure of inflation. A basket of goods is arbitrary ; the only real measure is what each of us spends money on individually or as families. Essentials have soared in price... food inflation alone has been appalling.

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Kevin Lohse - About 89 days ago

Agreed. Everybody has their own rate of inflation, depending on how their money is spent. Food inflation is a direct result of a misalliance between government policy and commodity availability. There can be no doubt that the lunatic idea of growing food for fuel has forced up food prices. Furthermore, the policy of heavily subsidising so-called renewable energy has been the prime cause of fuel poverty in Europe, most notably in Germany.
In Economics, there are no solutions, only trade-offs. The Global elite in charge of world affairs have much to answer for, and it's about time we challenged their ivory-tower concepts at the ballot box.

David Snell - About 89 days ago

Polly Toynbee shows her metropolitan bias in her remarks about poor people and driving. In cities, it may be practical to do without a car. In rural areas, poor people may be obliged to have a car because public transport isn't an option.

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David Boycott - About 89 days ago

With reference to Gareth Stone's comment, it was Toynbee's erstwhile hero, Gordon Brown, who changed the measure of inflation to CPI, to fall into line with practice in Toynbee's beloved EU.

No measure of inflation will capture everyone's cost of living, but CPI is the measure her lot have landed us with.

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Dougie Undersub - About 89 days ago

No doubt the Tuscan peasants La Toynbee looks down on from her villa are still on donkeys but, here in the real world, lots of poor people own cars.

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Deontay Wilder - About 89 days ago

I don't think "people at the very top" can be equated with the top 10% of households. More like the top 1%, even the top 0.5%.

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Adrian Boucher - About 89 days ago

Adam,

You should know that journalists seldom, if ever, let the facts get in the way of a juicy story. I think your reasoned, empirically-based response is simple excellent.
Kind wishes,


Adrian

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Anonymous - About 89 days ago

Only 8 errors? Polly had a good day then.

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Kevin Lohse - About 89 days ago

Only 8 errors by Polly? She did have a good day.

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Andrew Smith - About 89 days ago

The response to the criticism in pointy two does not really address the issue at all. It goes to the heart of the debate about whether immigration is beneficial to the country as a whole.

If GBP grows over a decade at about the same rate as the increase in population then we are overall worse off, simply because of the additional capital and advanced revenue expenditure needed to provide services to the added population.

So please let us know, how does the GDP growth over a reasonable run of years compare with the number of souls now sharing the goodies.

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