Budget hits the poorest hardest, says IFS

StevieJ

Graham_Devon wrote: »

To good an opportunity to miss this one!

You said that, as a labour supporter? The party that gave 24 hour licences the go ahead so people could buy alcohol round the clock?

Of course, thats different, right?

Of course it was different, it was an attempt to replicate cafe society as experienced in the rest of the continent where drunkeness is less pronounced.

stevsand

ILW wrote: »

I did hear an interview, and their main point seems to be that poor people living in very expensive houses in very expensive areas may have to move to cheaper areas. Seems logical to me.

That must me the private receiver in your head:rotfl:

StevieJ

Thrugelmir wrote: »

Selective memories. From 2002. Did Labour do any better by 2010?



http://www.independent.co.uk/news/uk/politics/blair-pledges-to-eradicate-child-poverty-by-2020-643123.html

What is your point? it says by 2020 unless I have done a Rip Van Winkle he and Labour were denied the opportunity

nickmason

In the Tory blogosphere there is a widespread belief (and these days the bloggers are sufficiently informed that beliefs are often true) that the purpose of this commission was to hurt Clegg, hence the timing.

A._Badger

StevieJ wrote: »

What is your point? it says by 2020 unless I have done a Rip Van Winkle he and Labour were denied the opportunity

Yes, you're right! And we were absolutely bang on course for it.... weren't we?

Malcolm.

Surely by definition the poor are meant to be poor? HB is to be limited to 400 a week, it's still a lot of benefit.

However, removing child benefit is a big no-no, it's not a family friendly policy.

Childcare in the UK is so very expensive and every little helps.

nickmason

StevieJ wrote: »

Nick, are the IFS not merely stating a truism i.e. if you reduce the benefits paid to the unemployed all things being equal, they will be worse off.

Absolutely. (No pun intended.) Especially when their calculations do hold other things to be equal, which clearly is a simplification. One that is fine for the purposes of this exercise, but as your post suggests, if you could either pay more benefits or not pay benefits and everything else remained equal either way, then obviously it would make sense to pay them!

But what they haven't said is "it will affect everyone, in keeping with the government's declared policy to tighten its belt and start to balance the books and although the rich will pay more and be more worse off in absolute terms, the poor will suffer a larger relative reduction in income".

In fact they have said pretty much that, but that's not the headline. Instead the headline focused purely on the relative interpretation. Which I suspect is why there remains some suspicion over the sponsors of the work - you would expect them to want to focus on the "relative" - just as the Country Landowners Association or some such would probably brief for a report with an absolutist focus; into how many pounds their members are losing compared with the much smaller costs to the poor.

This is a semantic debate. It's about relative vs absolute and the "battlefield" over progressive - hence why it's being blogged about everywhere and has been all over the radio. There's nothing new in the news itself - and as per my other post, it's probably much more about small "p" politics than it is about genuine economics.

Malcolm.

nickmason wrote: »

Absolutely. (No pun intended.) Especially when their calculations do hold other things to be equal, which clearly is a simplification. One that is fine for the purposes of this exercise, but as your post suggests, if you could either pay more benefits or not pay benefits and everything else remained equal either way, then obviously it would make sense to pay them!

Hi Nick, why is the coalition means testing child benefit. Nursery costs in the UK are far higher (cost over 12k year in my area) than abroad and the Conservatives promised to be family friendly?

The tories appear to only favour poor people having offspring.

Generali

StevieJ wrote: »

Nick, are the IFS not merely stating a truism i.e. if you reduce the benefits paid to the unemployed all things being equal, they will be worse off.

Nail <=> head.

If benefits are mostly paid to poor people and you cut benefits you cut payments to poor people.

The next point to consider is does the UK Government transfer too much, too little or just the right amount of money to people that claim benefits? From reading this board, I guess the answer most posters would give is 'too much'.

I think part of the argument the Tories have, which is one to which I am sympathetic is that if you make people stand on their own two feet then it may be a little painful at first but ultimately they will usually be better off.

nickmason

I haven't worked out how to add an image, but if you look at the graphs:
on page 9 of the report, you see the absolute figures alongside the relative ones, for tax and benefit reforms up to 2012.
They show that the bottom decile will lose a value equal to about 1.5% of expenditure, or 3% of income - which works out at about #200.
The middle 8 deciles all lose about 1.5% or 2% of expenditure or income (roughly equal) - which rises to about #750 for the second highest decile. The second lowest decile is the only group to take a smaller "cash" hit than the lowest.
The top decile will lose 6% of expenditure or 4.5% of income - something over #3000.

There is a similar chart that shows figures to 2014, where the percentage does drop as the deciles increase in income, but the total amount increases, until you reach the richest decile who still pay much much more.