Labour blasts 'disastrous’ austerity as families spend more than they earn for first time in 30 years
2 min read
Households in Britain are spending more each month than they are receiving in income for the first time in 30 years, new figures have shown.
The Office for National Statistics (ONS) found families spent or invested around £900 more than they made in 2017, amounting to almost £25bn.
The figures mean outgoings have surpassed income for the first time since 1988, when the shortfall was significantly lower at just £0.3bn.
Shadow Chancellor John McDonnell said the findings showed "the disastrous impact of eight years of austerity on the living standards of families".
According to the ONS, households took out nearly £80bn in loans last year, the most in a decade, as borrowing was shown to be vastly more popular than saving.
Meanwhile £37bn was deposited with UK banks, the smallet amount since 2011.
Last year households accumulated more debt, mostly from loans, than assets, such as deposits, shares and pensions since records began in 1987, according to the ONS.
If this were to continue, they warn, borrowers risk lacking the security to cover their debts.
In separate analysis, the ONS found that the poorest 10% of households spent two-and-a-half times their disposable income, on average, in the financial year ending 2017.
Meanwhile the wealthiest 10% spent less than half of their available income during the same period.
John McDonnell said: “In the same week that the Tory government delivered a slap in the face to workers over public sector pay, the ONS findings show the disastrous impact of eight years of austerity on the living standards of families.
“For the first time in nearly 30 years, we see average household outgoings surpassing incomes.
“The ONS findings are a stark example of how brutal Tory pay restraint and austerity has led to living costs outstripping earnings for families.”
Labour MP David Lammy, of pro-EU campaign Best for Britain said: "These new figures show that the uncertainty of Brexit is already hurting households up and down the country. They show the UK getting poorer - with the most vulnerable in society likely to be hit the hardest.
"Times will only get harder for my poorest constituents when Brexit actually happens, as tariffs are imposed, trade becomes more difficult and Britain’s economy shrinks.”
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