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Osborne budget not fair or progressive, says IFS
Business Digest: Cuts to public services mean poorest suffer proportionately more than richest, says Chote
Claims by Britain's coalition government that the emergency budget presented by George Osborne this week was "tough but fair" and "progressive" have been attacked by the independent Institute for Fiscal Studies.
IFS director Robert Chote said: "The Budget looks less progressive indeed somewhat regressive when you take out the effects of measures that were inherited from the previous government... and when you include some other measures that the Treasury has chosen not to model".
Cuts in housing benefit and in disability living allowance, more likely to affect the poorest, are not taken into account in official IFS and forecasts.
Using these factors and the rise in VAT, the IFS calculates that the poorest tenth of society will lose about 2.5 per cent of their income, despite the removal of 880,000 low-paid workers from income tax when the threshold was raised by £1,000 to £7,475.
But the rich have been hit by Osborne for only about one per cent of their average income. Thus the Chancellor has placed about two-and-a-half times the burden on the poorest as he has on the richest.
Read a full report at the Independent. ·
