Progressive cuts

Jim Pickard

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. Read more

Our economics team ran some tests to show the regional impact of cuts and illustrate the challenge of eliminating the deficit without punishing the poor.

If you cut social security payments by 10 per cent, for instance, they found the poorest areas were hit hardest. Household disposable income fell by 3.6 per cent in Merseyside and only 2.1 per cent in Berkshire and Buckinghamshire. Read more