IFS analysis is not selective: Treasury model only included two-thirds of benefit and tax credit changes
The Deputy Prime Minister has joined his Treasury colleague in maintaining that the IFS analysis of the distributional impact of the Budget is selective and partial. This is simply wrong. The Budget documents clearly state that only ‘two-thirds‘ of the benefit and tax credit changes are modelled in their analysis of the Budget’s impacts.
In contrast, IFS models all of them (using government data). This includes cuts to Housing Benefit, falls in the relative value of benefits after 2012/13 (as a result of CPI uprating), cuts in DLA and various cuts in Tax Credits. This is why their analysis shows the poorest losing most – all of the cuts the Treasury chose to leave out are highly regressive.
Unsurprisingly, IFS have told Channel 4 News they are ‘surprised by criticism from govt, we’re essentially doing exactly same as they did in Budget annexe, but incl more measures not less’.