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Clegg in the dock over ‘regressive’, unfair budget
The Mole: Lib Dem MPs revolt after the budget they were promised would be fair turns out to be anything but
Downing Street wouldn't say this morning exactly how long David Cameron plans to take as paternity leave - and how long Nick Clegg will continue 'holding the fort' while his boss stays at home holding the baby. But after the release yesterday of the IFS judgment on the June budget, the last thing the deputy PM needs is any more time in the spotlight.
In a nutshell, the IFS - the Institute for Fiscal Studies - has deemed George Osborne's emergency budget "clearly regressive".
Far from having fairness hardwired into it - as Clegg claimed at the time - it was quite the opposite. Because of the welfare cuts element, working families on the lowest incomes and particularly those with children were the budget's biggest losers.
The IFS concluded: "Once all of the benefit cuts are considered, the tax and benefit changes announced in the emergency budget are clearly regressive as, on average, they hit the poorest households more than those in the upper middle of the income distribution in cash, let alone percentage, terms."
Osborne himself will be pissed off at such a public ticking off and the chance it gives Labour to undermine his reputation. Ed Balls said yesterday:
"So much for the Tory-Lib Dem coalition's promise to be a family-friendly government. It is hard to think of any government in the history of our welfare state that has hit children and poor families so heavily and so fast."
But it is Clegg who finds himself in the deepest hole. He and his Lib Dem Cabinet colleagues have consistently argued - since striking the coalition pact with Cameron and coming round to the need for tough measures to tackle the national deficit - that the budget represented "progressive austerity".
An early taste of what's in store for Clegg came last night. Mike Hancock, a leading rebel Liberal Democrat MP, warned his leader that he faces a "sticky" party conference next month.
"We didn't sign up for a coalition that was going to hurt the poorest people in society," said the MP for Portsmouth South, "and I certainly didn't get elected to do that ever."
For the record, a spokesman for the Treasury said they don't accept the IFS analysis. "It is selective, ignoring the pro-growth and employment effects of Budget measures - such as helping households move from benefits into work, and reductions in corporation tax." ·
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What is fair? Anything that seeks to be fair always disadvantages or represents a level of unfairness for someone else - maybe George Osborne should just have avoided promising something fair. Perhaps the issue should be what's going to be best?
In answering that question and applying it to the budget it would produce a more reasoned and better argument. The budget may be tough but it's probably the best thing for the state we are in - is it fair? well whether you are rich or poor it's going to hurt and you could say it's unfair.
I continue to find it incredible that labour and liberal MP's demand a "fair" tax system whereby the rich would pay a higher % in tax than lower earners while completely missing the point that if everybody paid the same % - the richer would pay proportionately more anyway. Proof that the taxation systems they really want are based on envy - not fairness. So, to me, whatever way you look at it - these things will never be fair.
How odd; in opposition George Osborne was a great fan of the IFS. He regularly used its findings to challenge Labour!
But the budget stops a general financial collapse - and who would get hurt the most then ? The poorest of course.
The problem is insane left-wing propaganda has blinded us to the facts.
Reductions in corporation tax... right, that always helps poor families.
Well, then, let's have a detailed Treasury commentary on this IFS report. Quickly. So it boomerangs on Balls and Hancock.
Politicians work in this order
1.Self
2.Self
3.Close Contacts
4.Party
5.Government
6.Country
7.Populous
The overriding rule here is that when an event that challenges items 3-7 to give a positive benefit to items 1 or 2, then that event becomes priority.
This happens with any party, not just labour. I guess its a sign of the human, stuff over who you can to promote yourself.
This budget did exactly that, and just wait for the Spending Review... oh joy...