Household Incomes (Hansard, 14 July 1994)

§ Mr. Burt

The new edition of the household below average income—HBAI—statistics, covering the years 1979 to 1991–92, has been published today and copies have been placed in the Library.

The figures show that average disposable household incomes have grown in real terms by 36 per cent. between 1979 and 1991–92. Increases were not confined to a few top earners, and there have been appreciable increases in average incomes for all family types and economic status groups. Pensioners have done particularly well, with pensioner couples showing an increase in average income of up to 56 per cent. after housing costs and 46 per cent. before housing costs.

A complex picture emerges in the outcomes for the lower-incomes groups. This edition captures a particular point in the economic cycle when unemployment peaked, prior to the downward trend that followed. Interest rates had begun to fall, but were still much higher than their current levels. Another significant fctor is the potentially misleading impression given by the very low incomes reported by an increasing number of self-employed families. Analysis, in particular of the expenditure of these households reporting zero or negative incomes, shows that their spending patterns would place them in the top half of the income distribution. Indeed, there is evidence that the living standards, as measured by expenditure, of the bottom income 10 per cent. may be no lower than that of the second 10 per cent. There has also been a marked increase in their possession of consumer durables. The results shown in HBAI for the lowest income group cannot, therefore, be interpreted simply and should be treated with some caution.

The new family resources survey, which is due to replace the family expenditure survey as the data source for HBAI, will place special emphasis on gathering information from households on low incomes and so should help to improve the reliability of the information.