How minimum income standards compare between Britain and Northern Ireland.
The first Minimum Income Standard for Britain was launched in 2008 and represents an important new benchmark for economic well-being.
This study asks if this standard is applicable for Northern Ireland and whether it is possible to have a 'UK-wide MIS'. The study:
In 2008, JRF published the first 'minimum income standard for Britain' (MIS), based on what members of the public thought was needed to achieve a socially acceptable standard of living. This new research explores whether the standard is applicable to Northern Ireland.
By Noel Smith, Viet-Hai Phung, Abigail Davis and Donald Hirsch
The minimum income standard (MIS) is the income that people need in order to reach a minimum socially acceptable standard of living based on what members of the public think. It was first calculated in July 2008 by a team of researchers from the Universities of Loughborough and York, following research in which groups of members of the public specified baskets of goods and services needed as a minimum by different types of household. In July 2009 the standard was updated to reflect changes in prices.
The original research was carried out mainly in the Midlands in England, with some checking for geographical consistency in other parts of England, Scotland and Wales. The standard was interpreted as applying to Great Britain; this new research has made checks to see if the MIS is valid in Northern Ireland.
The research investigated two issues arising when looking at the minimum income required by households in Northern Ireland compared with the rest of the UK (Great Britain). First, do things cost more or less in Northern Ireland? Secondly, do different items need to go into budgets because of people's different views about what things are essential to achieve a minimum standard of living?
In most cases the prices of goods included in the budgets were the same in Northern Ireland as in Great Britain, because most of the stores used to price goods in the main research had outlets in Northern Ireland. Overall, more than 80 per cent of items in the budgets cost the same. The remainder had to be priced specifically for Northern Ireland.
In order to investigate the second question – that of possible differences in what to include in an essential budget – the original research technique of conducting discussions among members of the public was repeated selectively in Northern Ireland. Focus groups of different types of households were held in Belfast and Omagh. Most of the budget items they identified were similar to those selected in the English Midlands, but in some cases with specific differences in judgements about what was essential. For example, the Northern Ireland focus groups emphasised the importance of good quality local meat more than their equivalents in England. This meant including at least one high quality cut of meat a week in the Northern Ireland budgets, leading to a very small increase in overall food budgets.
As in the original research, the Northern Ireland groups were drawn from urban areas. The researchers recognised that some living expenses are likely to vary between urban and rural households, and other MIS research is currently looking at rural costs in England. However, given Northern Ireland’s relatively large population of rural households, it is important to note that this research did not take into account different or additional rural costs.
The budgets for Northern Ireland drawn up through this research were mainly similar to those for Britain, but with some differences. Overall, higher budgets in some spending areas for Northern Ireland were offset by lower budgets in others. This meant that the total budgets were similar. The research considered the needs of various household types and found that:
These comparisons did not include housing or childcare costs.
As an example, Figure 1 shows, for a single working-age adult, how differences in various parts of the budget balanced out between Northern Ireland and Britain.
The most significant areas of difference emerging from the research were as follows:
This study has shown that a few elements of a minimum budget in Northern Ireland are significantly different from Great Britain, but that most elements are very similar. The overall level of the minimum income standard is also similar, and not consistently higher or lower from one family type to another. In light of these results, the MIS for Britain can fairly be described as representing a minimum standard for the whole of the UK. Future reporting on MIS will therefore use this description.
Nevertheless, the Northern Ireland results are of value in offering a more local feel for the breakdown of the spending needs comprising the budgets. These differences can have significant implications for social policy. For example, a larger portion of the budget in Great Britain than in Northern Ireland comprises local taxation. In both cases, some families on low incomes have council tax or rates rebated. The net income requirements in Northern Ireland are higher.
As in Great Britain, the Northern Ireland results give a benchmark that can inform social policy. They show that safety net benefits cover less than half the MIS for working-age people without children, about two-thirds for those with children, and about the same level as MIS for pensioners claiming Pension Credit. They also show that the minimum wage is too low for most people to reach the MIS with a single earner in the family. Finally, they show that almost all those who fall below 60 per cent of median income – the main government poverty line – are unable to reach a minimum standard of living as defined by this research.
The Centre for Research in Social Policy at Loughborough University carried out this study. It involved extensive desk-based research and four focus groups, two in Belfast and two in Omagh, comprising:
Day workshops were held with all groups except working-age adults, who participated in an evening group.