The chart that could cause trouble for the coalition
Peter Hoskin 3:10pm
Just as they did in the Budget, the coalition have produced a chart showing the impact of the Spending Review's tax, spend and benefit measures on different income groups (see above). In many respects, this is a noble effort: it's a good deal more transparency than Gordon Brown could ever manage in his Budgets. But it also sets a trap for the coalition.
As we've pointed out before, these kinds of analyses don't account for measures that can't be quantified in terms of the money handed out to, or taken away from, the public. So policies that might improve the life chances of the least well-off, such as better schools or benefit reform, don't get a look in.
Instead, the coalition's opponents will focus on the fact that, say, the poorest people are the second most affected income group. And when the IFS produces its own version of this chart, then we can expect the debate over "progressiveness" to flare up once again – just as it did back in August.
UPDATE: As Paul Waugh points out, coalitioneers are highlighting that the lowest income
decile is a different beast to the others. As the Spending Review itself says:
"It should be noted that the bottom decile contains many households with temporarily low incomes, for whom income based analysis, as opposed to expenditure based analysis, may not give an accurate picture of living conditions. In this decile, around 40 percent of households contain an adult that is self employed or a student. While some of these households will have permanently low incomes, many will not. In contrast, in the second decile, only around 20 percent of households contain an adult in one of these groups."
Previous
Peter From Maidstone
October 20th, 2010 3:27pm Report this commentIs it the poor who are hit, or those who could work and won't work and their families? Any family that starts working will be better off in the new arrangements, and they should be working. If they continue to refuse to work, and are disappointed that they can't hand their council home down to their children and grand-children then that is something I think most working people will be able to bear.
Is this chart showing that individual 'poor' people will be worse off, or that there will be less money spent on the 'poor' people because it is expected that many 'poor' people will have to get a job and so will not be in that category any more?
Rhoda Klapp
October 20th, 2010 3:32pm Report this commentWell, a lot of us don't even know what equivalised net income decile we are in. Or what that means, for one is not in a income group. Pensioners and students may have the same income, but they do not form a group, nor are they equally treated by these measures nor the other manifold changes in price and service from non-government sources. To sum up, this is not transparent at all, it is irrelevant in practical terms.
However, it is worth pointing out that there is a question-begging element in all this income disparity nonsense. Poor people are the ones bad things happen to. If they were not, they wouldn't be poor people. All the bad things happen to them. Bad services, bad education, bad housing, bad luck, bad health. If all those bad things happen to you, time and time again, you are by nature or habit or choice a poor person. Luckily the nation will pay you to be so, as long as you like. But it's absurd for the nation to feel guilty about it, or try to change your outcomes if you will not try yourself.
Mark Cannon
October 20th, 2010 3:46pm Report this commentI suspect that it is very hard not to have a higher impact on the lowest 10% than higher bands: their income is so low to start with that virtually any detriment looks big in percentage terms.
perdix
October 20th, 2010 3:50pm Report this commentThere is a wider analysis of this on ConHome:
http://conservativehome.blogs.com/thetorydiary/2010/10/have-the-coalition-balanced-the-budget-on-the-backs-of-the-poorest.html
David Ossitt
October 20th, 2010 3:54pm Report this commentPeter From Maidstone
“Is it the poor who are hit, or those who could work and won't work and their families?”
Peter you have a valid point. I agree with your argument.
dorothy wilson
October 20th, 2010 4:18pm Report this commentPeter from Maidstone has raised exactly the point in my mind before I opened this site. I had just watched the 4 o'clock headlines on Sky and heard the guy from the IFS spouting.
Dimoto
October 20th, 2010 4:50pm Report this commentYes, it's truly amazing to learn, that it's the POOR who receive nearly all of the social benefits - who woulda thunk it ?!
Not only that, if the benefit bill is cut, it falls on BENEFIT RECIPIENTS !
Wow ! this is getting more and more interesting .....
Any inclusion in that graph of the billions of lost revenue to pensioners from the Bank artificially suppressing interest rates ?
No, I thought not.
TrevorsDen
October 20th, 2010 5:14pm Report this commentWhat a pity it is then that Brown so mismanaged the economy to leave us in this mess.
Sunder Katwala
October 20th, 2010 6:26pm Report this commentGiven that today's measures are the green bars at the top, everything new today was regressive across the gradient.
Any overall progressivity all still comes from not reversing Alastair Darling's measures.
And this chart is about tax and benefit changes. The spending measures are separate: they're regressive too.
Simon Stephenson
October 21st, 2010 8:52am Report this commentPeter from Maidstone - 3.27pm
"Is it the poor who are hit, or those who could work and won't work and their families?"
Mmmmm. Could the correct answer possibly be both, Peter?
Certainly if it's correct to conclude that the "poor" are exclusively undeserving work-refuseniks, then it's not difficult to argue for welfare reduction as sound and equitable policy. But the key point at issue is whether the entire welfare-receiving poor are undeserving, or if there are some people who are incapable of survival without social support.
It's surely not right merely to assume a state of affairs to be true just because it being so is supportive to the argument one wishes to make.
Peter From Maidstone
October 21st, 2010 12:05pm Report this commentSimon, I think you misunderstand the point I was making.
If the budget spent on the 'poor' is X billion at present, and will be Y billion in the future, but the numbers of the 'poor' are reduced by N % then these figures do not show that those who remain on benefits will be worse off at all, only that as the numbers of those on benefit is reduced the amount spent on benefits will also reduce.
It seems incontrovertible that there are large numbers of benefit claimants who could work but choose not to. If their benefit income is reduced and it becomes least worst to actually work then that would be a good thing in many people's minds.
Such a process need not have a negative impact on those who do not work and cannot work for some genuine reason.
kevin
October 21st, 2010 7:59pm Report this commentpeople seem to forget, there is others owe cant work ,the ill and disabled, these people are probably in easy jobs getting money for doing f all,some of us have been flogged that hard our bodys wont take anymore cameron and clegg should burn in hell,they have admitted lying to get elected, cant wait for the next election roll on.
kevin
October 21st, 2010 8:12pm Report this commentthere is people on here havnt got a clue, i say to you sign on the sick when your ill, see how long it takes for a letter from atos to drop on your mat, you will be subject to a strict medical within weeks, if you can tie your shoelases they f you in the a. so why find the nead to make disabled people and there familys suffer, because a couple of greedy nazis said so, very soon thay will introduce euthenasia.
james
October 21st, 2010 8:46pm Report this commentwould you all just take a moment to think what would happen if you lost your job, bussiness or had an illnes. you might drop from your castle and end up in the poor group,where are all the jobs. I grew up poor and now rich ,there but for the grace of god i go .
Emma
October 21st, 2010 9:04pm Report this commentI work day in and out at CAB and I agree that the benefits system needs a major overhaul to prevent abuse, but these blanket cuts are going to hurt the most vulnerable, those being the disabled (or those that want to work but can’t) and children in these and other families that rely on as housing benefit and low-income (working tax). Kids are innocent bystanders in this until they grow up into idiots that can't run the country.
George Osbourne has no idea what it is like to go without, i.e. live in poverty, being part of the old Anglo-Irish aristocracy known as the Ascendancy and a man that is heir to the baronetcy of Ballentaylor, he doesn’t have a clue, and he doesn’t really care, as this spending review has shown.
Men like Osbourne, and other MP’s, with similar titles and family backgrounds are the last people we need taking care of peoples "welfare". It wasn’t so long ago that we got a true glimpse of their morals and ethics when many of them were exposed for indulging at the tax-payer’s expense.
Poverty is a real problem here in the UK and it isn't all caused by public dishonesty. The national deficit hasn’t been caused solely from an abused welfare system, or from supporting those on the poverty line. I think the very public expose of MP’s not so long ago gives a pretty good indicator of why this country is in such a mess financially.
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