Apologies if this argument has already been made elsewhere – if so I haven’t seen it. Amid all the hoopla about the IFS report on the Budget (which suggests that it falls hardest on the poor) most commentators seem to have missed a very simple point: cuts to public spending are, by their very nature, bad news for poor people.
Why? Because people with less money are more reliant, proportionately, on the state. That applies to a vast range of public services such as subsidised transport, care, education and of course benefits.
I do agree with Nicolas Smith of the TUC when she says that “it’s time for the Government to stop pretending that the steepest cuts since WW2 are compatible with fairness”. That always seemed a tenuous argument by the coalition.
But when you bear in mind that cutting public spending is automatically regressive then how exactly could ministers prevent the inevitable? It’s a genuine question. And one that the next Labour leader also needs to answer. Where are the magic spending cuts that hurt the well-off and not the poor?
(Of course the government could achieve deficit reduction through a greater emphasis on tax rises - as David Miliband has suggested - but that’s a different point).
One economist points out to me that there is a department which provides a service to everyone across all demographics and socio-economic backgrounds: it is health, ironically. That suggests there could be a case for lifting the ring-fence on health spending on “progressive” grounds, allowing smaller cuts elsewhere. Not that the public would necessarily buy that argument, however.
Jim Pickard
Kiran Stacey