Spending cuts will hit the poorest
Only a few weeks ago, the Government was seriously embarrassed by IFS research showing that the changes to tax and benefits bear down hardest on the poor. But so far no-one has yet worked out the impact of spending cuts on different income groups.
It’s common sense that the poor use public transport more than the rich, and pensioners use the NHS more than the young. But no-one has yet put all the data together to work out the precise impact of the big cuts planned by the government.
Today we launch a substantial independent report that does exactly this.
It is based on the most thorough analysis of who benefits from UK public spending ever carried out. It means that we can use what the Government has said about its spending plans over the next three years to work out how they will hit different groups.
What we can now definitively say is that the spending cuts will make the poll tax look like something dreamed up by Robin Hood.
This graph shows the likely impact of the planned cuts on each ten per cent band of earners.
The poorest ten per cent are set to suffer from cuts equal to 20p for every pound of their income, while the richest ten per cent suffer from a cut of less than one and half pence in their standard of living.
In other words the poorest ten per cent lose more than thirteen times as much as the richest ten per cent. Right across the income bands: the poorer you are, the more you lose.
Coalition ministers say their policies are progressive. They have promised that they will protect the vulnerable, not increase inequality and will not open up a new north/south divide.
Yet today’s figures show exactly the opposite. This is classic doublethink. They say progressive, but these cuts will make the poll tax look as if it was dreamed up by Robin Hood.
Each day it becomes more clear that there are alternative ways to drive down the deficit. These deep cuts not only threaten services, but risk economic recovery.
You do not need to deny the deficit to see that there are practical alternative ways of reducing it.
There is no need for such a rapid timetable. There could be a much greater role for tax increases fairly targeted on those with the broadest shoulders; and there could be much more emphasis on investment to stimulate greener growth.
The only conclusion is that the government is making a political choice, not following economic necessity.
Ministers are following policies deliberately designed to make Britain a far more unequal society. Those who did least to cause the crash pay the most, and those at the top face no more than demands for small change.
But voters last May did not vote for a radical and permanent cutback in the scale and scope of public services.
The poll tax was defeated when the decent majority stood up and said no. It offended the deep sense of fairness that we share in this country across party divides.
The cuts have only just started to bite. When their full extent becomes clear, I know the country will join with us in saying ‘no’ once again to policies that are so eye-wateringly unfair.