Just before Christmas, the UK Chancellor was widely ridiculed for saying that people who'd built up savings during the pandemic should help the economy by going on a spending spree when it ends. This week, the govenor of the Bank of England joined in Looking at the numbers, I can see where they're coming from.
Don't get me wrong, I share the outrage that filled my newsfeed in response to this story. How out of touch do you have to be not to realise that most people have been really struggling? Rent payments didn't go down during lockdown, and neither did utility bills. Even those on the furlough scheme saw a pay cut of 20% while many of the self employed, myself included, didn't qualify for any government support at all. So what was the chancellor thinking, talking about savings building up?
In fact, the quarterly report of the state of the nation's finances does show a big increase in savings. It's really striking; there's never been anything like it before.
Clearly, a lot of money has been going into savings accounts. One could be forgiven for thinking that everyone's sitting at home, squirrelling away all that spare income that they can't spend on going out. One, perhaps, but not the Chancellor of the Exchequor, who really should know better than to treat a single figure as representing all of the people.
This brings me back to the question I asked in the title: Who has been saving? A briefing paper filed in the House of Commons library on 13th January gives a bit more detail.
This divides the population into five equal-sized groups based on their incomes. It's clear that the poorest 20% of the population haven't been saving at all, they've been using up any savings they had. It's the second-richest group who've been stashing money away. The briefing paper is coy about what the actual incomes are for those five groups, but it's possible to look this up; the poorest 20% are those earning up £16,900 a year, and the second-richest group earn between £31,000 and £42,400 a year. It's interesting that the richest group haven't increased their savings - presumably they've found other things to spend their money on.
Two general points emerge from this story. One is the danger - for ministers as much as for Joe Bloggs on facebook - of responding to the headline without checking the details. The other is the way coronavirus has highlighted and reinforced the inequalities in our society. I will leave you with this succinct expression of the situation, by the writer Damian Barr.
Storm illustration by Barbara Kelley