The lead story for most press & broadcasters today is the conclusion by the Institute for Fiscal Studies (IFS) that proposed ConDem welfare cuts in the June budget make working families on the lowest incomes, and particularly those with children, the biggest losers.
The report states: "Once all of the benefit cuts are considered, the tax and benefit changes announced in the emergency Budget are clearly regressive as, on average, they hit the poorest households more than those in the upper middle of the income distribution in cash, let alone percentage, terms."
According to the Beeb, the IFS analysis suggests that cuts to areas such as housing benefit and disability allowance would hit the poorest families to the tune of £422 between the Budget and April 2014. This means that only the richest 10% of households lost more in cash terms from the Budget, than those in the bottom 60%.
The report also questioned the government's decision to use the Consumer Prices Index (CPI) instead of the Retail Prices Index (RPI) when calculating certain benefits.
These findings come as a rebuttal of George Osborne's earlier claims that his austerity package was progressive in that it shielded poor families. There has been no comment from the chancellor although a Treasury statement last night claimed the IFS analysis was “selective” and ignored “the pro-growth and employment effects of budget measures such as helping households move from benefits into work, and reductions in corporation tax”.
Nick Clegg has previously maintained that the budget represented "progressive austerity" and that fairness was “hard-wired” into government proposals. Sound- bites aside, it is unlikely that many Lib Dem MPs will be comfortable with such a negative assessment from Britain's leading independent tax experts. But whether they actually do anything about it is probably just as doubtful.
We will also have to wait and see if the Welsh Lib Dem’s finance spokesman has any progressive thoughts about regressive budgets.
Update:
Nick Clegg has dismissed the IFS findings as "by definition, partial". The problem is that he fails to elaborate on whether he means partial (incomplete) or partial (opposite of impartial) or both - as if it matters anyway.
His response is that "If you just look at who is receiving benefits then, in a sense, you don't ask the most important question of all, which is how you can relieve poverty and make Britain fairer by getting people off benefits and into work."
The bottom line however is that when George Osborne described his Budget measures as progressive, he was referring to changes taking effect by 2012. The IFS argues that we should look at a longer period, up to 2014, taking in a fuller range of measures including cuts to housing benefit. Over to you, Nick.
Update:
Nick Clegg has dismissed the IFS findings as "by definition, partial". The problem is that he fails to elaborate on whether he means partial (incomplete) or partial (opposite of impartial) or both - as if it matters anyway.
His response is that "If you just look at who is receiving benefits then, in a sense, you don't ask the most important question of all, which is how you can relieve poverty and make Britain fairer by getting people off benefits and into work."
The bottom line however is that when George Osborne described his Budget measures as progressive, he was referring to changes taking effect by 2012. The IFS argues that we should look at a longer period, up to 2014, taking in a fuller range of measures including cuts to housing benefit. Over to you, Nick.
7 Comments:
The IFS confirms a clear consensus among analysts that the budget failed Clegg's own fairness test. The Channel Four fact-check put the point more colourfully back in June by stating that the IFS "breakdown makes the coalition look less like Robin Hood and more like Marie Antoinette".
And still no comments from the leader of the Lib Dems ot Tory party in Wales
I would like to hear what they have to say about this report
Continued radio silence on ConDem unfairness from Black either on his blog or his Serfdom Central alter-ego. Isn't this the same guy who recently wrote "the Liberal Democrats are now a party of government and in our policies and our values we reflect the views of the vast majority of the electorate"?
It is summed up in two paragraphs in the report:
"Those who lose the least are households of working age without children in the upper half of the income distribution.
"They do not lose out from cuts in welfare spending, and they are the biggest beneficiaries from the increase in the income tax personal allowance."
You have to laugh. Black has just posted something on Freedcom Central about WAG measures to help first time buyers being "badly targeted".
More bad news for the Lib Dems, the ITV Wales/YouGov monthly tracker poll for August shows them at 10%.
http://ogarethhughes.blogspot.com/2010/08/assembly-voting-intentions.html
It is quite fitting that a government propped up by Liberal Democrats should be challenged by the Human Rights lobby to prove that its austerity budget took equality issues into account. Politics in this country has taken a turn for the surreal.
Post a Comment