Who benefits?

We’re confident that the assessment by the Institute of Fiscal Studies on the Chancellor’s Autumn Statement will be either rubbished or ignored by ConDem blogs. As a result, we thought it would be useful to reproduce a chunk of what is published in today’s Independent.

The poor will suffer disproportionately from the Chancellor's failure to increase tax credits, a study by the IFS concludes, and will not benefit to the same extent as the better-off from the council tax freeze (because they pay less council tax) and the delay of the fuel duty increase (because they drive less).

The overall effect of the Treasury's new plans will be to reduce the incomes of those in the bottom 30 per cent of earners and to benefit those in the top 60 per cent. The Chancellor's decision will also push more children into poverty, IFS researchers conclude.

Those with an annual income of £15,600 will lose an average of £44.75 in the year 2012-13. Those earning £18,200 will be worse off by about £36 in the same year. By contrast, those with an annual income of £76,100 will benefit by about £105, thanks to Mr Osborne's most recent tax changes. Those with a yearly salary of £45,300 will get £98 more.

As a result of all the tax and benefit measures by Mr Osborne since he became Chancellor in May 2010, the IFS calculates that those in the bottom 10 per cent of earners will see their annual incomes decline by £168 in 2012-13. Those in the second to last 10 per cent of earners will see their incomes go down by £265.

The incomes of the top 10 per cent of earners will decline by £300 and those of the second-highest 10 per cent will fall by £102. Although similar in cash terms to the sums lost by those at the bottom end of the income distribution, these losses represent a much smaller share of the total incomes of the wealthy.

Researchers at the IFS have also calculated that average incomes of people in the UK will drop by 7.4 per cent in the three years between 2009 and 2013. It estimates that average household incomes will be no higher in 2015-16 than they were in 2002-03.

The IFS's calculations on incomes are based on the growth forecasts of the Office for Budget Responsibility – which in turn are based on the assumption that European leaders will "struggle through" the eurozone debt crisis.

No doubt there will be some sniping at the IFS figures by Whitehall and political mouthpieces but the underlying and undeniable message is that this government which talks a lot more about equality than it practices it.

More to the point however is that if this imbalance is the result of a Lib Dem ‘moderating influence’ upon the Chancellor then they should pack it in now.