IN the 1980s I used to teach my economics students that there were three different ways of measuring the size of our economy: by measuring the output of goods and services (national product), by the total expenditure on all those goods and services (national expenditure), or by adding up all the incomes paid for producing those goods and services (national income).

Each measure should, in theory, come to the same figure because they are just different ways of measuring the same thing.

One of the principal complaints of opposition politicians is the way in which our real incomes have been squeezed during the long recession that began in 2008 when our national income peaked.

They are salivating at the prospect of confronting voters at an election with the question: “Are you better or worse off now than you were at the last election?”

The statisticians tell us that from peak to trough during the recession our economy may have shrunk by as much as seven to eight per cent.

This would make it the worst recession within 100 years and certainly worse (and longer) than the great recession of the 1930s. So, the size of our economy shrank significantly and our national income shrank significantly.

It follows, therefore, that each of our real disposable incomes are likely to have been squeezed significantly.

The most effective remedy to our squeezed incomes is the sustained growth in employment. We have seen 1.6 million new private sector jobs since 2010.

For every job cut from the public sector the private sector has created three new ones. There have been a number of measures which have taken the pressure off our disposable incomes: reduced income tax with the tax free allowance rising to £10,000; cancelled fuel duty increases; and the freezing of council tax.

It is argued that one section of the community which has seen disposable income disproportionately affected: those living on benefit. I am conscious that I have voted to reduce our benefits bill by £90bn over the lifetime of this five-year parliament.

To the minority who complain the policy lacks compassion, I respond by telling them that there is nothing compassionate about a system that traps people by making them better off on benefits than they would be by taking a job. Our only prospect of returning to prosperity and rising incomes is a growing economy built on an economic plan to live within our means. We need to earn it before we spend it.