That ‘progressive’ budget and coalition denial

The Institute for Fiscal Studies has published a report that claims that the coaltion’s  (Tory in actual fact) emergency budget is set to hit the poorest. Of course this has been denied by the government who believe that poor people are a figment of our imaginations or are simply defrauding the less-than-generous benefit system.

The Tories were quite happy to cite (well, cherry-pick) the IFS findings on the public finances before the General Election and used them as a stick to beat up Labour. Now that the IFS has come out with a report that criticizes their cherished plan to kill the poor, they don’t want to know. In fact, they are in denial.  Contrary to their deluded beliefs, child poverty is set to rise.

James Browne, senior research economist with the IFS and co-author of the report, said: “It seems likely that, once changes to other benefits are taken into account, child poverty will go up.”

In his budget, the Honorable Gid said

“the policies in this Budget, taken together, will not increase measured child poverty over the next two years” and that “overall, everyone will pay something, but the people at the bottom of the income scale will pay proportionately less than the people at the top. It is a progressive Budget.”

The word “progressive” is being used ironically.  With VAT set to rise in January, the cost of living will rise accordingly. And while there is no VAT on food, the knock-on effect from higher fuel duties will impact on the price of food and other essentials. The only people who will be able to absorb the higher costs are the wealthy.

Here’s what Nick Clegg said about the Budget.

“This time, the richest are paying the most … as a proportion of their income.”

A comedian as well as a liar.

The Guardian’s leader column paints a  stark picture

No minister can read this report and attempt to describe their measures as fair. They are anything but. Nor is it the case that these regressive measures are a one-off. Far from it: the biggest reason the chancellor’s emergency budget is so unfair is because he has permanently pegged benefits to the lower consumer price index (CPI) rather than the old retail prices index (RPI). That may sound technical, but consider this: CPI is currently just above 3%, while RPI is nearly 5%. Now imagine your disability benefits inching up by 3% a year every year rather than 5%: within just a few years that leaves you with a big shortfall. This one fact puts in perspective the recent speculation about how Iain Duncan Smith is fighting for more generous welfare provision – a couple of billion extra does not offset the many billions being taken from society’s support for the poorest. With full access to all the Treasury models, Mr Osborne will have known how much poorer he was about to make some of the most vulnerable members of society – yet he went ahead and did it anyway.

The Lib Dems have acted as the Tories handmaidens. But there are many who are deeply troubled by this. They know they could lose their seats in the next General Election (which could be as early as next year).

Mike Hancock, a former member of the SDP and MP for Portsmouth South said,

“We didn’t sign up for a coalition that was going to hurt the poorest people in society, and I certainly didn’t get elected to do that ever.”

He adds,

“If that fairness is not there, there are some serious questions for the leadership to answer.”

Clegg and the rest of the leadership can expect a rough ride at conference next month. But MPs like Hancock will not cross the floor or split from the party. These are not men of principle rather, they are careerists and opportunists like the rest of them.

Conference season is going to be very lively indeed…but for all the wrong reasons!

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6 Comments

Filed under Big Society, ConDem Budget 2010, Government & politics, Public spending

6 responses to “That ‘progressive’ budget and coalition denial

  1. hello again…

    Well, the budget was 80% pencilled-in by Darling. I suggest you wait until the October spending review and you will be able to scream from the rooftops that everybody will be hit…and they will be.

    The child poverty point is a bit polemic as it is purely headline grabbing: if people become unemployed their income is cut drastically and so their children will most likely fall into the poverty count. Amusingly some could live in a mansion with a pool and acres of land where they ride their horses yet still be “in poverty” Unlikely but possible.

  2. The point about child poverty is not a “polemic” as you so euphemistically put it. It exists. But I don’t suppose you know many people on the poverty line.

    If you think that I approved of the last government, you are mistaken. But as for the budget being “80 % pencilled in by Darling”. That is simply absurd.

  3. Well Darling seemed to think so.

    What is polemic is the dailymailesque headline grabbing, not the poverty; I know poverty exists, I know child poverty exists, I know in the UK it exists at a level far, far below the ludicrous 20% figures banded about and I know some children live in poor families. You’re right about one thing, I don’t know many people on the poverty line, well, not in the UK at least.

    • I’m sure the irony of your comment about the Daily Mail was unintentional. Darling seemed to think what, exactly? You sort of trailed off….

      If you know that child poverty (as well as other forms of poverty) exists, then why the denial?

  4. The irony being?…that you presume anyone who disagrees with you must be a daily mail-reading, knee-jerk reactionary loon?

    Re Darling was re his response to Osborne’s budget, very subdued; he couldn’t find much to say probably because he was so shocked that most of it was his idea…

    Re child poverty, what denial?

    Anyway, thanks for replying but I won’t be able to post another comment for at least a day or two.

    Nice blog btw.

    • buddyhell

      You said,
      “The irony being?…that you presume anyone who disagrees with you must be a daily mail-reading, knee-jerk reactionary loon”?

      Have I upset you?

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