At the time of the Conservative-Liberal Democrat Budget in June, Nick Clegg boasted that it was “progressive” and did not target the poorest.
But the Institute for Fiscal Studies – a respected, independent research organisation – has published a startling rebuttal of that claim.
Using the Government’s own statistics, the report concludes that “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 levels of the income distribution in cash, let alone percentage, terms”.
The approach taken by the Government – to make the poorest in our society pay for the reduction in our national debt – is wrong, and it is not what they promised before the election.
It is in sharp contrast to Labour’s proposals, which would have seen the richest taking a fairer share of the burden.
The coalition’s budget was not only unfair, but economically misconceived. Nobody denies the need to take steps to reduce public sector debt in the UK. The real economic debate is about the speed and scale of the reduction.
But we need to put things in perspective.
Statistics show Britain’s public debt to be 59 per cent of its gross domestic product. In France, public debt is 61 per cent of GDP; in the US, 65 per cent; in Italy, 101 per cent; and in Japan, 105 per cent.
Labour’s plan was to halve the budget deficit over four years. The coalition wants to eliminate it in five years. This not only threatens public services, it is too severe a reduction and risks another recession.
It is unsurprising that Conservatives like county council leader Keith Mitchell ignore the analysis of bodies like the IFS. It doesn’t suit their ideological attack on public services.
The Liberal Democrats’ support for such a dangerously unfair economic policy is more difficult to understand.
Richard Stevens Oxfordshire county councillor County Hall
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