Peter Hoskin

More must be done for the victims of the recession

Just returning to the theme of my earlier post, I thought I’d flag up some IFS figures which indicate how fiscally squeezed the least well-off are, even before we consider taxes, job losses and the rest.  Here’s how today’s Times reports them:

“The poorest tenth of the population suffers inflation more than 50 times higher than the RPI measure, which is 0.1 per cent, the Institute for Fiscal Studies said. The most hard-pressed households have an effective inflation rate of 5.4 per cent, while those aged over 80 face a 7.1 per cent annual rise in prices because both of these households spend a bigger proportion of income on food and energy, both of which are still rising in cost. In contrast, rich households are enjoying a fall in the cost of living, with -1.3 per cent inflation; 30 to 39-year-olds have inflation of -0.9 per cent.”

Now, I’m not advocating similar measures to those Polly Toynbee calls for in the Guardian today (50 percent top rate of tax! Now!).  Far from being progressive, that kind of thing is actually regressive – disincentivising those who will help motor our economy out of the downturn – and, as per Laffer, could actually result in a lower tax take for the Exchequer.  But when so much public cash is being blown on schemes of often dubious worth, that so little is being done, or even said, for the least well-off is a severe moral failure.

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