Households have been pushed nearly £2,000 into the red in the period since Theresa May became prime minister, according to TUC analysis published today (Friday) as she prepares to resign the Conservative Party leadership.
In every reported quarter since her arrival in Downing Street (2016 Q4 to 2018 Q4), families’ outgoings have outstripped their incomes. This has resulted in a total deficit of £54 billion – equivalent to an average of £2,000 per household.
When Theresa May became prime minister, she promised to support “just about managing” families. But this analysis shows that in her three years as PM, the pressure on household budgets has increased, pushing “JAMs” even closer to the financial cliff edge.
In the 1980s – the last time household expenditure outstripped income – the deficits were driven by high spending.
But under May, spending has grown by an average of just 2.1% a year. In the same period, however, real disposable incomes have grown by only 1% as a result of still-weak wage growth.
In other words, families are being forced to borrow simply to maintain a basic standard of living. Previous TUC analysis shows that unsecured borrowing is at a record high of £15,945 per household.
TUC General Secretary Frances O’Grady said: “While Theresa May’s government has torn itself to shreds over Brexit, working families have been left high and dry.
“In her first speech as prime minister, Mrs May promised to tackle burning injustices. But as she prepares to leave Number 10, pay growth has stalled and millions of people are stuck in low-quality and insecure jobs. Many working households can’t make ends meet without being forced into the red.
“The next prime minister must forget Conservative in-fighting and take urgent action to improve pay and living standards.”