"Are you better off now than you were four years ago?"

With the budget coming up next week, it is that time of year where Gordon Brown lays it on thick that this country has never had it so good and that we have seen ten consecutive years of growth and he has been the longest serving chancellor in history and then he says something else, but I'm always asleep by this point. You would have thought that all this meant that we have more money in our pockets than ever before. Of course, things are not always what they seem.

The Centre for Policy Studies think tank has reported that we are virtually no better off than we were six years ago. In fact, in real terms, households have an extra £9 disposable income in our pockets. This is a growth rate of just 0.35 per cent a year - I bet Gordon doesn't bore us with that statistic next Wednesday. Tax lawyer Charlie Elphicke, who led the study, uses the example of Ronald Reagan when he asked the question in the 1980 US Presidential debates - "are you better off now than you were four years ago?" As Elphicke points out "-For the average voter, the answer to Ronald Reagan's question is likely to be a resounding no.-" The report also concludes that the lowest income households in Britain are paying a higher share of tax - and receiving a lower share of benefits - than they were in 1996/7. The Treasury have countered the report with claims that disposable income has increased since 1997. For a government that came to power promising that income tax will not rise only for it raise just about every other tax possible and create a few more on top of that, it is hard to believe a word they say.