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Chapter 1: What are the deceptive claims made about welfare benefits versus minimum wage?
Hello and welcome to More or Less. We're the programme that clears up more statistical goalmouth scrambles than Cape Verde's goalkeeper, and I, aiming for a clean sheet as always, am Tim Harford. It's hot and damp, and that means we can start talking about wet bulbs. But what is a wet bulb temperature? And could we hit critical levels, as a viral social media post has claimed?
The World Cup continues its majestic progress, but why are the permutations for the knockout round so extraordinarily complicated? And with the help of Ellis James, we explore why everyone in Wales seems to have a friend in common with everyone else.
But first, at the start of June, Conservative MP and former Chancellor of the Exchequer Sir Jeremy Hunt was a guest on Radio 4's Start the Week, where they were discussing solutions to the UK's economic problems. In the discussion, he made a striking claim.
Chapter 2: What is wet bulb temperature and why is it significant?
I think that we've gone very badly wrong when it comes to the welfare state. If you're on the three main out-of-work benefits, you'll be earning between £31,000 and £46,000. If you're working full-time on the national living wage after tax, you get £22,000. It's just not possible to run a modern economy with those kinds of incentives. We received a lot of emails about this.
Chapter 3: How does the World Cup draw work with 48 teams?
So Keen Bean and more or less reporter Nathan Gower stuck his hand up. Hello, Nathan.
Hi, Tim. So I got in touch with Jeremy Hunt and his office, offered to sit down, discuss it over a flat white. That is a deep cut, Nathan.
Chapter 4: What statistical framework explains the success of Welsh comedian Elis James?
One for the aficionados, Tim. No, I emailed them and they sent me a detailed breakdown of how they came up with these figures.
Well, that sounds very helpful.
It certainly was. Quick definition here, the National Living Wage, Jeremy Hunt talks about, is the official name for what we generally call the minimum wage for those 21 and over. But now for the benefits. These figures that he cites are for two hypothetical individuals who are both claiming three benefits – housing benefit, universal credit and personal independence payments –
Now we'll come back to these benefits later, but let's start with the numbers attached to them. So one of these individuals lives in Newcastle. They're the £31,000 example. The other lives in London. They're the £46,000 one. That difference between the two figures is because you get more housing benefit in London than in Newcastle. OK, makes sense. Let's focus on London for now.
Jeremy Hunt's claim is that if you live in London and are on these three benefits, you'll be earning £46,000. But when I read his office's breakdown of the figure, it was clear that the figure is deceptive. Someone on those benefits would not receive £46,000 a year. They'd only get about £37,000.
So why did he say £46,000?
That's how much an employed person would need to earn before tax in order to have a take-home income of £37,000, what the benefits claimant is getting.
That's strange, but it is hard trying to compare benefits and employed income because one's subject to tax and one isn't, so you've got to make an adjustment somewhere. So maybe that's what he was doing?
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Chapter 5: How do the benefits figures compare to minimum wage earnings?
He's adjusting the benefits income so you can more fairly compare it to a pre-tax salary.
Tim, that is you all over. Charitable to a fault. Thank you, Nathan. Charitable and wrong. As he says in the original clip, Jeremy Hunt does precisely the opposite. He compares it not to a pre-tax salary, but to an after-tax salary. That £22,000 he talks about is how much you take home on the minimum wage after tax.
Wait a minute, that is brazen. So he's adjusted the benefits income upwards, so it's like a pre-tax salary... But then he's adjusted the minimum wage figure downwards, so it's a post-tax income. It's a double adjustment. Jacques Hughes! So, Nathan, if you only did this tax adjustment once, which is the correct number of times, what would you get?
Let's look at how much you'd actually get in your bank account. So sticking with the London example, for the benefits claimant, they'd get about £37,000, while someone full-time on minimum wage after tax would take home about £22,000, as Jeremy Hunt correctly said. Everything that we've said about the London example holds for the Newcastle one as well, remember.
A single person in Newcastle will get about £25,500 compared to the £22,000 on minimum wage.
So doing it right means that the differences shrink a lot, but the figures for the benefits are still higher than the figures for the minimum wage.
But that brings me on to the second big problem – The examples of benefit claimants that Jeremy Hunt has chosen are not typical of people who are out of work.
How so?
Well, they're not just out of work, they're also disabled. In fact, to receive the payments that Jeremy Hunt describes, they would have to be recognised as severely disabled. Edwin Latimer is a senior research economist at the Institute for Fiscal Studies, focusing on benefits policy and the low-paid labour market.
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Chapter 6: Why are the examples of benefit claimants used by Jeremy Hunt not typical?
So thinking about that group of single people out of work without children, the average benefit recipient gets around £15,000 a year. And so both the examples that hunt sites get significantly more than that and are in the top 10% of single people receiving benefits.
There's one other massive thing to mention here. Because these hypothetical claimants are on the top level of health benefits, they're exempt from the benefits cap. This is a policy brought in by the then-Chancellor George Osborne in 2013 to limit how much money a household could receive in benefits. For a single adult with no kids outside London, it's capped at about £15,000.
Inside London, it's about £17,000.
So if they didn't receive these disability-related benefits, there'd be a hard cap on how much they can receive, and they'd get nowhere near the figures that Jeremy Hunt's using. Correct. OK, Nathan, the first part of the more or less dance is over. We've done what we usually do, unpack an eyebrow-raising claim, only to find that it's stuffed full of unjustified comparisons.
Now, while I always enjoy the sugar rush of a good debunk, is there something a bit more meaningful to say?
I am all about the high fibre content, Tim.
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Chapter 7: What is the impact of wet bulb temperatures on vulnerable populations?
If we want to have a proper analysis of incentives when it comes to working versus being on benefits, we have to look at what happens to someone's actual income, the amount they get in their bank account, as they move from benefits into work. Now, you could try and do that for Jeremy Hunt's examples, but these are people who have been assessed as having severe disabilities.
So there's a good chance that many of them wouldn't be able to make that transition, though hopefully some would. Instead, I asked Edwin to run the numbers for perhaps a more typical scenario, someone who's still disabled, but less so.
OK.
So take a single renter in Newcastle. They're out of work and get a more moderate level of disability benefit, as well as support for their rental costs. Their income from benefits would be about £16,000. But if they start working full-time on the minimum wage, that income would rise to £28,000, £12,000 more.
I should say that figure is based on them keeping the £6,000 that they were getting in personal independence payments. So that's a disability benefit, but it's not an out-of-work benefit. You can get it while you're working, but even without it, they're still better off. Edwin Latimer again.
So they would be getting £22,000 or nearly £23,000 in earnings and that would leave them better off than the £16,000 that they were getting out of work. So they would still be better off in work than out of work. The gap would be smaller.
Thank you, Nathan. And thank you to Edwin Latimer from the Institute for Fiscal Studies. Nathan, what did Jeremy Hunt have to say about all this? His office told us... Jeremy is grateful to more or less for pointing out that in a relatively quick-fire exchange, he inadvertently used the net rather than gross salary for the national living wage. I'm glad to hear he is correcting the record.
Oh, he did have one more thing to say. Hi, can I get a flat white, please? Not now, Jeremy. You don't need me to tell you that it is hot out there. Very hot. Temperatures have been in the high 30s in a central part of southern England and eastern Wales.
But online, lots of people are talking about a different kind of temperature, still measured in Celsius, but called something a little bit strange.
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Chapter 8: How do social connections in Wales influence Ellis James's comedy?
This is the critical threshold for vulnerable populations, elderly, infants or individuals with chronic illnesses.
So what is a wet bulb temperature? And are we really on the brink of a critical threshold for vulnerable people? To find out, I spoke to Dr Chloe Brimacombe, a climate scientist and postdoctoral researcher at the University of Oxford.
When we take a temperature reading we use a thermometer and this would be what we call dry bulb temperature. Now the difference of wet bulb temperature is it's basically the same thermometer but we wrap it in a damp muslin cloth similar to ones that you might use to sort of burp a baby so it's basically a thermometer wrapped in this damp cloth.
And it's an indication of how much moisture the air can hold, but also our ability to lose heat through sweating.
Think of that wet bulb thermometer as a proxy for a human being dripping with sweat and evaporating away heat. It is basically telling you how effectively you can cool yourself through sweating.
In usual circumstances, even if the normal temperature is high... When the relative humidity, so the amount of moisture in the air, is lower, the wet bulb temperature is lower because it can pass that energy into the surrounding air.
there are two things that could cause that wet bulb temperature to creep up. The first is a rise in the normal temperature, the dry bulb temperature. But the other is a rise in humidity. Humidity is important because if it gets too high, it's harder for us to lose heat through the evaporation of sweat. At an extreme situation of 100% humidity, you can't lose any heat this way.
So if the amount of moisture in the air reaches 100%, then the dry bulb temperature and the wet bulb temperature would be the same because you would no longer be able to lose any heat. You would no longer be able to cool down that thermometer through the moisture from the muslin cloth.
And that also would be an indicator that sweating is going to do you no good either.
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