IFS: Osborne’s Budget is “clearly regressive”

The bottom half of the income distribution will be hit more than the top half by the Coalition's June Budget, new analysis by the Institute for Fiscal Studies has revealed.

Poorer families will be hit harder than rich families by the Coalition’s June Budget, new analysis by the Institute for Fiscal Studies has revealed. The IFS says that “once all of the benefit cuts are considered, the tax and benefit changes announced in the emergency Budget are clearly regressive” as “they hit the poorest households more than those in the upper-middle of the income distribution in cash, let alone percentage, terms”.

Labour leadership candidate Ed Balls called the analysis, “the final nail in the coffin for George Osborne’s claims to have delivered anything but the most regressive Budget in a generation.” The Chancellor had claimed that his Budget was a ‘progressive Budget’ that would hit the richest more than the poorest, yet the analysis clearly states that:

“IFS researchers have previously cast doubt on this claim, noting that the main measures which will lead to losses amongst better-off households were announced by the previous government, and that the reforms to be in place by 2014–15 are generally regressive“.

The IFS analysis goes on:

“The distributional analysis in the Budget documents also excluded the effects of some cuts to housing benefit, Disability Living Allowance and tax credits that will tend to hit the bottom half of the income distribution more than the top half…

Low-income households of working age lose the most as a proportion of income from the tax and benefit reforms announced in the emergency Budget. Those who lose the least are households of working age without children in the upper half of the income distribution.”

Today’s IFS analysis confirms Left Foot Forward’s coverage of the Budget:

• On June 22nd, Tim Horton and Howard Reed were the first analysts to outline the regressive nature of the tax and benefit changes in the Budget;

• On June 26th, Will Straw and Tom Phillips published data showing that deprived areas would be hit hardest by cuts;

• On June 27th Horton and Reed published a briefing paper for the TUC which concluded that the impact of the Coalition’s spending cuts was “deeply regressive … All households are hit considerably, but the poorest households are hit the hardest”.

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78 Responses to “IFS: Osborne’s Budget is “clearly regressive””

  1. Rosie

    RT @leftfootfwd: IFS: Osborne's Budget is regressive & will hit the poorest households more: http://bit.ly/bP0wPz #ConDemNation

  2. Tom Miller

    RT @leftfootfwd: IFS: Osborne's Budget is regressive & will hit the poorest households more: http://bit.ly/bP0wPz #ConDemNation

  3. Shamik Das

    RT @leftfootfwd: IFS: Osborne's Budget is regressive & will hit the poorest households more http://bit.ly/bP0wPz #ConDemNation #FalseEconomy

  4. Sarah Stanbridge

    RT @leftfootfwd: IFS: Osborne's Budget is regressive & will hit the poorest households more: http://bit.ly/bP0wPz #ConDemNation

  5. Max

    RT @leftfootfwd: IFS: Osborne's Budget is regressive & will hit the poorest households more: http://bit.ly/bP0wPz #ConDemNation

  6. Chris Goulden

    RT @leftfootfwd: IFS: Osborne's Budget is regressive & will hit the poorest households more: http://bit.ly/bP0wPz #ConDemNation

  7. chocodel

    RT @leftfootfwd: IFS: Osborne's Budget is regressive & will hit the poorest households more: http://bit.ly/bP0wPz #ConDemNation

  8. winston k moss aka 9xzulug

    sorry to say it but what did this unelected coalition CONDEM(us all)PARTY expect.VAT was not necessary but closing offshore banking/tax loopholes were but they ignored that due to their parties r/wing element dictating the party.FACT

  9. Evidence based.

    Is this graph misleading like the last one? Does it include the totality of the financial measures included; i.e the proposed Labour policies the coalition introduced (also bear in mind Darling admitted he wanted to increase VAT). Furthermore you are looking at progressivity through a specific (if i’m being cynical convieniant) spectrum. Whilst benefit cuts would show up on your model, i presume that impacts of things such as IDS’s welfare reforms would not be included? Lastly, it is jumping the gun to profess that you can honestly say you know the impact that a VAT hike would have on actual prices. When it was cut there was little movement, which indicates (neither of us know whether this will be the case) that there may be little actual movement this time. My point is (like usual on this site) is that trying to pass this off as concrete fact is misleading.

  10. Duncan Stott

    Yep, it is only showing the effect of policies announced in the June 2010 budget, not the cumulative effect of both Labour’s and the Coalition’s budgets. This is misleading. The graph doesn’t show what the actual impact on people’s lives will be.

  11. Dave Forrest

    RT @leftfootfwd: IFS: Osborne's Budget is "clearly regressive": http://bit.ly/dbXZC5 #ConDemNation

  12. Warren Morgan

    RT @leftfootfwd: IFS: Osborne's Budget is "clearly regressive": http://bit.ly/dbXZC5 #ConDemNation

  13. John Brissenden

    RT @leftfootfwd: IFS: Osborne's Budget is "clearly regressive": http://bit.ly/dbXZC5 #ConDemNation

  14. Daren

    RT @dominiccampbell Going 2 be big news shortly I'd say RT @leftfootfwd: IFS: Osborne's Budget is "clearly regressive": http://bit.ly/dbXZC5

  15. isla dowds

    RT @leftfootfwd: IFS: Osborne's Budget is "clearly regressive" http://bit.ly/aNnWtu NOW will LDs admit it..Vince? before we lose all faith

  16. Anna Hedge

    Just as well Cameron has has his baby now,because he'll have a whirlwind to tackle after *this* ….http://bit.ly/dbXZC5

  17. Claire Hazelgrove

    Hopefully! RT @dominiccampbell: Big news shortly I'd say RT @leftfootfwd IFS: Osborne's Budget is "clearly regressive" http://bit.ly/dbXZC5

  18. Dave Forrest

    We're in this together aren't we, Dave? RT @leftfootfwd
    IFS: Osborne's Budget is "clearly regressive": http://bit.ly/dbXZC5 #ConDemNation

  19. Wes Streeting

    RT @BevaniteEllie: RT @dominiccampbell: Going to be big news shortly I'd say RT @leftfootfwd: IFS: Osborne's Budget is"clearly regressive" http://bit.ly/dbXZC5

  20. Ell Aitch

    RT @leftfootfwd: IFS: Osborne's Budget is "clearly regressive": http://bit.ly/dbXZC5 #ConDemNation

  21. Lyn Iglinsky

    RT @dominiccampbell: Going 2 B big news shortly I'd say RT @leftfootfwd: IFS: Osborne's Budget is "clearly regressive": http://bit.ly/dbXZC5

  22. One Society campaign

    Big news: IFS confirm that families & poorest hit hardest by Budget cuts http://bit.ly/cUfh7Z (also see http://bit.ly/dbXZC5)

  23. Sarah Stanbridge

    RT @One_Society: Big news: IFS confirm that families & poorest hit hardest by Budget cuts http://bit.ly/cUfh7Z (also see http://bit.ly/dbXZC5)

  24. Tulip Siddiq

    RT @leftfootfwd: IFS: Osborne's Budget is "clearly regressive": http://bit.ly/dbXZC5 #ConDemNation

  25. AnotherCountry

    UK – Osborne's Budget is "clearly regressive
    http://bit.ly/c6glk3

  26. Robert Dale

    will be interesting to see how this story develops–> RT @leftfootfwd IFS: Osborne's Budget "clearly regressive": http://bit.ly/dbXZC5 #cuts

  27. Stephen Harman

    RT @leftfootfwd: IFS: Osborne's Budget is "clearly regressive": http://bit.ly/dbXZC5 #ConDemNation

  28. Moose de Carabas

    The government felt the need to embargo this until midnight. Hmm. http://bit.ly/9PRT0w

  29. Mark Rugman

    RT @dominiccampbell: Going to be big news shortly I'd say RT @leftfootfwd: IFS: Osborne's Budget is "clearly regressive": http://bit.ly/dbXZC5

  30. Chris

    To all the leftie/Social Liberals reading – Thanks for nothing.

  31. Claudio Carvalho

    IFS: Osborne’s Budget is regressive & will hit the poorest households more http://bit.ly/9LOEnr

  32. NoSuitableCandidate

    RT @leftfootfwd: IFS: Osborne's Budget is "clearly regressive": http://bit.ly/dbXZC5 #ConDemNation

  33. Geoff Reid

    Osbourne a 'Chinless Fuckwit' says I, and the IFS calls his budget 'Regressive, says Left Foot Forward http://bit.ly/alsWQL

  34. LockPickerNet

    IFS: Osborne's Budget is "clearly regressive": http://bit.ly/dbXZC5 #ConDemNation via @leftfootfwd

  35. michael fourman

    RT @langtry_girl Just as well Cameron has has his baby now,because he'll have a whirlwind to tackle after *this* ….http://bit.ly/dbXZC5

  36. Claire French

    RT @leftfootfwd: IFS: Osborne's Budget is "clearly regressive": http://bit.ly/dbXZC5 #ConDemNation

  37. Reading Labour Party

    RT @leftfootfwd IFS: Osborne's Budget is "clearly regressive": http://bit.ly/dbXZC5 #ConDemNation

  38. Andy Sutherland

    RT @leftfootfwd: IFS: Osborne's Budget is "clearly regressive": http://bit.ly/dbXZC5 #ConDemNation

  39. Mike Wiltshire

    RT @leftfootfwd: IFS: Osborne's Budget is "clearly regressive": http://bit.ly/dbXZC5 #ConDemNation

  40. Alan Marshall

    RT @leftfootfwd IFS: Osborne's Budget is "clearly regressive": http://bit.ly/dbXZC5 #ConDemNation

  41. Will Straw

    Carcrash radio from Mark Hoban insisting that the Budget was progressive. When will the Coalition face facts? http://bit.ly/dbXZC5

  42. Andy Sutherland

    RT @wdjstraw: Carcrash radio from Mark Hoban insisting that the Budget was progressive. When will the Coalition face facts? http://bit.ly/dbXZC5

  43. Anthony Painter

    “@wdjstraw: Carcrash radio from Mark Hoban insisting….Budget was progressive. When will the Coalition face facts? http://bit.ly/dbXZC5”

  44. Rich Watts

    RT @dominiccampbell: RT @leftfootfwd: IFS: Osborne's Budget is "clearly regressive": http://bit.ly/dbXZC5

  45. B Latif

    RT @wdjstraw: Carcrash radio from Mark Hoban insisting that the Budget was progressive. When will the #Coalition face.. http://bit.ly/dbXZC5

  46. SSP Campsie

    RT @wdjstraw: Carcrash radio from Mark Hoban insisting that the Budget was progressive. When will the Coalition face facts? http://bit.ly/dbXZC5

  47. Rich Watts

    RT @leftfootfwd: IFS: Osborne's Budget is "clearly regressive" http://bit.ly/aNnWtu

  48. Joe Powell

    RT @wdjstraw: Carcrash radio from Mark Hoban insisting that the Budget was progressive. When will the Coalition face facts? http://bit.ly/dbXZC5

  49. Daniel Blaney

    RT @wdjstraw: Carcrash radio from Mark Hoban insisting that the Budget was progressive. When will the Coalition face facts? http://bit.ly/dbXZC5

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