“Fairness”: a 3.9% cut for the poor; a 4% cut for the rich

John Rentoul

dist13 300x226 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.

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  • Hill244

    Ah fairness! That chimera in Britain! Is it fair that Louise Mensch was not arrested after naming Ched Evans “victim” on Twitter? Or that L Berger was parachuted into a Liverpool safe seat cos she told Daddy it would be jolly fun to be an MP?

  • JohnJustice

    The point about a 4 per cent cut being easier for the rich to bear than the poor is the crucial one here. By no stretch of the imagination can these roughly equal cuts between the rich and poor be regarded as fair. For those with the broadest shoulders to share the burden in terms of the hurt that they inflict the cuts for them would have to be to the order of 50 per cent and even then they would be sitting pretty by comparison.

  • Firozali A.Mulla

    There is no cream that can make you fair Poor are poor I thank you FirozaliA.Mulla DBA

  • mightymark

    “I would have thought that the Liberal Democrats would be a lot more worried about this than they seem to be.”

    Not half as much as they are worried about the seats they’ll lose at the next election!

  • greggf

    But lots believe there is, Firo……

  • coalitionkid

    I see – but it IS fair for those working people who are locked out of the benefit system through no fault of their own on the 2nd – 4th deciles . The fact that John Rentoul compares things on a benefits-based culture speaks volumes. The real problem is accommodation costs that rocketed under the last Labour government. If Labour were in power how would these figures be changed – the `squeezed middle` would be worse off because they wouldn’t have had the tax reductions and Labour would have just do what they usually do stick their heads in the sand and not reform anything. Or would the `squeezed middle` just be made to suffer at the altar of old fashioned social democratic without the reforms thinking?

  • Firozali A.Mulla

    You do not make a sweeping statement without backing this I thank you Firozali A.Mulla These come form the words of wisdom

  • Pacificweather

    If you make the decision that the top quintile income starts at £48,500 then you get one figure but if you decide it starts at £82,365 you get another. Decide the answer you want and then adjust the selection points to provide the desired answer.

  • greggf

    QED firo

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