Policy and Politics
IFS warns coalition about impact of budget reforms
A row broke out last week after the respected Institute of Fiscal Studies slammed the coalition government's budget as 'regressive' and said that the poorest families would be hit hardest.
Deputy Prime Minister Nick Clegg, standing in for David Cameron, was forced to defend the budget. He told the BBC the report was 'by definition, partial'. He said, 'It does not include the things we want to do to get people off benefits and into work.'
The IFS report was commissioned by the End Child Poverty campaign.
The analysis by the IFS takes account of the impact of all the budget's changes up to 2014, analyses the June 2010 Budget changes separately from those announced previously and includes changes to Housing Benefit and Disability Living Allowance.
It found that the poorest families with children lose more than any other group and are set to lose five per cent of their income.
The finding contradicts Chancellor George Osborne's budget statement that although everyone would 'pay something ... the people at the bottom of the income scale would pay proportionately less than the people at the top'.
The report said, 'Low-income households of working age lose the most from the June 2010 budget because of the cuts to welfare spending. 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 are the biggest beneficiaries of the increase in the personal allowance.'
Fiona Weir, a spokesperson for the End Child Poverty campaign, said, 'The coalition has committed to ending child poverty by 2020, but its cuts are hitting the poorest families hardest. It's not fair that children should have to pay for the cuts and it is shocking that the poorest families are bearing the brunt of them. The spending review will need to show clearly how the Government will deliver on the commitment to ending child poverty, ensuring that cuts fall on those most able to pay.'
