“One of the worst failures of the last government was that living standards went down, people were actually worse off at the end of the government than they were at the beginning of the government.”
Speaking at the launch of the government’s “Plan for Change” last week, the Prime Minister Sir Keir Starmer claimed that living standards “went down” under the previous government, and that “people were actually worse off at the end of the government than they were at the beginning of the government”.
It’s not entirely clear what time period or measure of living standards Mr Starmer was referring to—we’ve asked Number 10 but haven’t had a response.
Mr Starmer was responding to a question about Real Household Disposable Income (RHDI)—a commonly used measure of living standards, and one of the measures the government itself has said it will use to measure progress on living standards over its time in office.
The latest quarterly RHDI data does not support Mr Starmer’s claim that living standards “went down” under the previous government. Separate pieces of analysis from the Institute for Fiscal Studies (IFS) and the Resolution Foundation both suggest that RHDI per person has increased in every parliament since 1955, including across the time the Conservatives were in government between 2010 and 2024.
It is true that the most recent parliament (2019-2024) saw the weakest RHDI per person growth on record, with both the IFS and Resolution Foundation putting it at 0.3% a year—but this is not the same as saying living standards actually “went down”.
Looking at different measures of living standards over different time periods can paint different pictures, however.
The Resolution Foundation says GDP per capita—the other measure being used by the government to assess its target of improving living standards—decreased by 0.1% over the most recent parliament (though this period was heavily impacted by the pandemic). Across the Conservatives’ time in office as a whole (between 2010 and 2024) though, GDP per capita increased.
Both RHDI per person and GDP per capita are affected by changes in population size, and the Resolution Foundation notes that these figures may be revised downwards in light of higher-than-previously-estimated net migration figures (which we’ve written about here).
It’s worth noting that ahead of the general election it was widely reported that RHDI looked set to have fallen over the course of the parliament. However this is not what’s now shown by the latest quarterly figures (as a result of both the timing of the election and the difference between forecasts and actual data).
Indeed, it’s possible that Mr Starmer was referring to calendar year data which shows a decrease in RHDI per person between 2019 and 2023—but this data does not cover the entirety of the last parliament.
Similarly, government data on household incomes published earlier this year showed that median household income in 2022/23 was lower than in 2019/20. However the Institute for Fiscal Studies has noted that this data is published with a lag, so can’t currently be used to assess what happened over the entirety of the parliament.
Mr Starmer’s claim was identified with the help of Full Fact’s AI tools.