“Fairness”: a 3.9% cut for the poor; a 4% cut for the rich
“To ensure fairness, we are making sure that those with the broadest shoulders bear the greatest burden.” George Osborne, in his email to supporters after the Spending Round.
Only just; only by a whisker of a tenth of one per cent, a figure that is bound to be revised. Here is the Chart of Everything from the Spending Round documents: showing the effect of all policy changes since June 2010. The richest fifth of households will lose 4% of their income in 2015-16 compared with 2010-11; the poorest fifth will lose 3.9%.
The weird shape of the distributional impact of changes in taxes, benefits and benefits in kind from public services shows that the effect of Government policy has been to make four-fifths of the population less equal, but the rhetoric of “fairness” is saved, just, by the burden borne by the richest 20 per cent of the population. (And this is before we get into the point that a 4 per cent cut is easier for the rich to bear, even if it is much more money, than for the poor.)
I would have thought that the Liberal Democrats would be a lot more worried about this than they seem to be.
Update: Ed Conway of Sky News points out that the relative position of the poor worsened against that of the rich comparing 2014-15 (the last year forecast in the Budget in March) and 2015-16, by comparing the Chart of Everything with that in the Budget.Tagged in: equality, george osborne, inequality, nick clegg, spending review, spending round
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