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Why this seven-year comparison may be distorting the true picture

By John Simpson

The independent, community- orientated Resolution Foundation has compared the varying experiences of the regions of the UK following the big recent recession. As might be expected, Northern Ireland comes out at the bottom of the league table for the size of average household incomes.

However, there are other features of the inter-regional changes which are a surprise. One of the possible reasons for the unexpected results may stem from the choice of dates on which the comparisons are based.

From 2007/08 to 2014, household incomes in Northern Ireland (adjusted for inflation) fell by 4%. Yet in Scotland and the north East of England household incomes increased by 1.9% and 3.9% respectively.

The authors of the Resolution Foundation report do urge caution. First, they ask whether the official statistics are sufficiently reliable for this type of test. Second, are the official statistics now slightly out of date?

There is a further reason why the seven-year comparison may be distorted. Northern Ireland has endured a steeper recession than other regions but this needs to be measured against not just where we are now but where we started from. If Northern Ireland was, in 2007, enjoying a stronger recovery, then the fall in average household incomes by £864 a year is larger because the incomes figures were, relatively, higher than other regions in 2007.

As political parties develop policies for the economy, the evidence is a critical building block. The temptation will be to link the statistics with constraints imposed by public sector spending cuts.

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