From the TUC

IFS confirm that families and the poorest are hit hardest by Budget cuts

25 Aug 2010, by in Society & Welfare

Today End Child Poverty reports on new research, commissioned from the IFS, that shows definitively what many others have highlighted – the cuts announced in the Budget will hit families and the poorest the hardest.

As we showed immediately after the Budget, the Chancellor’s claim that the spending changes he announced were ‘progressive’ has always been contentious – significantly the Treasury’s modelling did not include a third of social security changes, including cuts to Housing Benefit and Disability Living Allowance, and only changes up until 2012/13 were considered.

This IFS research puts the Budget’s regressive impact beyond doubt: the poorest will be hit more than many of the richest in cash terms let alone as a percentage; poor and middle income families with children lose out more than any other household types and the very poorest families with children lose more than any other groups – with 5% of their total income being cut.

The IFS’s graph shows the effect of the tax and benefit reforms announced in the June Budget (to be introduced by April 2014) by income decile and household type.  It makes the Budget’s impacts absolutely clear: the poorest families lose the most and the wealthiest the least.

graph

And this is before the significant impact of cuts in public services has been considered. Research undertaken for the TUC by Landman Economics and the Fabian Society has shown that the cuts the Coalition are proposing will lead to an average annual cut in public spending on the poorest tenth of households of £1,344, equivalent to 20.5% of their household income, whereas the average annual cut in public spending on the richest tenth of households will be £1,135, equivalent to just 1.6% of their household income.

Spending cuts on the scale that the Coalition is proposing simply cannot be achieved without the poorest being hardest hit – it’s time for the Government to stop pretending that the steepest cuts since WW2 are compatible with fairness.

3 Responses to IFS confirm that families and the poorest are hit hardest by Budget cuts

  1. Tom Clark
    Aug 25th 2010, 10:58 am

    Much done by Labour Govt. but failed in pledges to end child poverty by 2020. Lets tory’libs. off the hook no matter what they do. Single parents, easy target. Where are the jobs these people are supposed to fill. Who pays the non existent childcare if a place exists.

  2. Nick Clegg responds to the IFS: another new definition of fairness | ToUChstone blog: A public policy blog from the TUC
    Aug 26th 2010, 10:54 am

    […] FT features an opinion piece from Nick Clegg, where he sets out his refutation of the IFS’s analysis. The Government line seems to have changed from yesterday (when the Financial Secretary to the […]

  3. Why Nick Clegg’s attempts to redefine ‘fairness’ don’t stack up | Liberal Conspiracy
    Aug 27th 2010, 10:11 am

    […] Yesterday’s FT featured an opinion piece from Nick Clegg, where he set out his refutation of the IFS’s analysis. […]