Wednesday, August 25, 2010

Budget hits the poorest hardest, says IFS.

This should come as no surprise to anyone who has been paying the slightest amount of attention to what George Osborne is up to.

The new coalition government's emergency Budget announced in June has hit the poorest families hardest, a leading economic think tank has says.

The Institute for Fiscal Studies (IFS) said the measures announced in the Budget were "regressive".

Its analysis suggests the poorest households are set to lose the most as a percentage of net income due to benefit cuts announced in the Budget.

The Treasury said it did not accept the "selective" findings of the IFS.

The IFS had already challenged the government's claim that the Budget was "progressive".

Its report concluded: "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."

I have pointed out before that this budget seeks to reduce the deficit by a ratio of 77% of spending cuts and an increase in taxation of 23%.

That fact alone tells us that the poorest, those most dependent on benefits, are the people who Osborne has decided should make the largest contribution to wiping out a deficit run up by bankers gambling with other people's savings.

The report said: "Low-income households of working age lose the most as a proportion of income from the tax and benefit reforms announced in the emergency budget.

"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."

I am honestly not remotely surprised to hear this. I thought this at the time that the budget was announced. This is simply what Conservative government's do.

Nor am I surprised to hear that this government does not accept this reading of the figures.

The shadow work and pensions secretary Yvette Cooper accused the government of carrying out a "shocking and unfair attack on children and families".

"The idea that the poorest families with children should end up being hit hardest is appalling and gives lie to George Osborne's claim it was a progressive budget," she said.

Osborne, like most Conservatives before him, loathes the poor and those dependent on benefits. This heir to the Osborne baronetcy, a man born into a life of wealth and privilege, cannot imagine a world in which people need help. He possibly imagines that he is deserving of the wonderful lifestyle which he has been born into, that he had something to do with the winning lottery card which life dropped into his lap, and this has left him with only disdain for others born not as lucky as he was.

So, seeking to balance the books, he savagely attacks those on benefits, and possibly imagines that he is helping them as he does so. After all, he has never had to ask for government help, so why should others?

Of course, he's also never had to work a day in his life thanks to the fabulous wealth of his family, but he probably flatters himself that he had something to do with that.

I am speculating, of course. But that's the only way I can imagine that anyone could come up with the budget which Osborne came up with. How else could he justify making the poorest in society contribute the most to wiping out a debt run up by banker's greed?

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