Are we really all in it together?

Howard Reed reports on how the coalition's cuts show that the poorest will be hit hardest - particularly single parents families and single pensioners.

In attempting to justify the deep and savage cuts program which the Conservative-led government embarked upon this year, David Cameron and George Osborne have often invoked the rhetoric that “we are all in this together”.

This is an inspirational turn of phrase – but unfortunately for them, completely untrue. Research from a variety of sources show that some of us are much more “in it” than others: pretty much whichever aspects of the cuts one looks at, those must vulnerable are being hit hardest.

To give some examples:

Across the income distribution: research by Tim Horton and myself which allocates the different elements of public spending to households in the UK using survey data has shown that the cuts announced in the 2010 Spending Review are likely to hit the poorest ten per cent of the population around five times harder than the richest ten per cent (measuring the cuts as a proportion of each household’s income plus the value of services they receive).

The graph below, taken from a presentation I gave to the TUC just after the Spending Review, shows this clearly:


By gender:: Analysis of the same data by family type suggests that single parent families and single pensioners are worst affected by the cuts in percentage terms. There are many more women than men in these family types. Thus, the cuts are likely to increase gender inequalities, as explained in more detail in this report by the Women’s Budget Group.

Across local areas: There is a clear – and depressing – correlation between the extent of spending cuts announced by communities and local government secretary Eric Pickles in December and the level of deprivation in each area as measured by statistical indices. Basically, the more deprived an area is, the more its support grant from central government is being cut over the next four years.

This was pointed out separately by Will Straw on this blog and by the New Local Government Network when the cuts were originally announced.

Across regions of the UK: A drastic shrinking of the public sector will have the greatest impact on those areas least able to cope with it. The graph below shows, on the horizontal axis, the employment rate in each region of the UK for working age people, and on the vertical axis the public sector’s share in Gross Value Added (the total value of goods and services produced in each region).

Impact-of-cuts-per-region
With the exception of London, there is a very clear correlation between regions where the public sector is a large proportion of the economy and regions with lower employment rates (and correspondingly more unemployment and/or working age inactivity). This is particularly worrying given that the Office for Budget Responsibility’s own forecasts suggest that unemployment will not return to pre-financial crisis levels until the second half of this decade.

In summary, across a whole range of measures, the coalition’s spending cuts fail the fairness test and give the lie to Cameron and Osborne’s claim that “those with the broadest shoulders are bearing the heaviest burden”.

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39 Responses to “Are we really all in it together?”

  1. Me

    RT @leftfootfwd: Are we really all in it together? http://bit.ly/igQqSF by Howard Reed

  2. Andy Bean

    RT @leftfootfwd: Are we really all in it together? http://bit.ly/igQqSF by Howard Reed

  3. Chris Allison

    RT @leftfootfwd: Are we really all in it together? http://bit.ly/igQqSF by Howard Reed

  4. Phil Wass

    RT @leftfootfwd: Are we really all in it together? http://bit.ly/igQqSF by Howard Reed

  5. Anon E Mouse

    So the rich have a better easier life than the poor?

    Wow great research. Don’t you have a job to do in the daytime?

    Bet Harriet Harman, the multi millionaire countess toff, educated at the same school as George Osborne isn’t suffering too much. Or her husband, Jack Dromey, the union dinosaur who won an election on an all woman short list…

  6. Steve Gardiner

    RT @leftfootfwd: Are we really all in it together? http://bit.ly/igQqSF by Howard Reed

  7. Watching You

    Exposing the Tory spin RT @leftfootfwd: Are we really all in it together? http://bit.ly/igQqSF by Howard Reed

  8. UNISON East Midlands

    Are we really all in it together? http://is.gd/Hef4U6

  9. Michelle McFarlane

    RT @UNISONEastMids: Are we really all in it together? http://is.gd/Hef4U6

  10. 13eastie

    It is a crying shame that almost entire workforces have been institutionalised and sequestered by the State, that whole regions have, through hopelessly ‘targeted’ Labour funding, been discouraged from engaging in enterprise and thereby joining the productive part of the economy.

    Worse yet, there are writers at LFF who seemingly do not believe that there is any issue arising from nigh-on 70% state-sector employment, which generates neither profit nor tax.

    If 70% is NOT too high, what level would be? Or should we be pursuing the elimination of enterprise from the UK altogether?

    Why is there no consideration whatsoever for how many tax-paying and profit-making private sector jobs need to be destroyed through taxation to create one job at the Town Hall? Are these jobs worth less to the country and economy?

    Nice to see Baldwin has LFF eating out of his “Conservative-led” hand, by the way. Lefty blogs are all in it together, eh?

  11. peter kobi

    RT @leftfootfwd: Are we really all in it together? http://bit.ly/igQqSF by Howard Reed

  12. Will Straw

    Great summary by Howard Reed of all the evidence showing that we're NOT all in this together http://bit.ly/igQqSF

  13. Lee Hyde

    RT @wdjstraw: Great summary by Howard Reed of all the evidence showing that we're NOT all in this together http://bit.ly/igQqSF

  14. Eleanor Besley

    RT @leftfootfwd: Are we really all in it together? http://bit.ly/fIR1Hs

  15. sophiaparker

    RT @wdjstraw: Great summary by Howard Reed of all the evidence showing that we're NOT all in this together http://bit.ly/igQqSF

  16. Lynda Waltho

    RT @wdjstraw: Great summary by Howard Reed of all the evidence showing that we're NOT all in this together http://bit.ly/igQqSF

  17. marcus john

    Are we really all in it together? http://bit.ly/e7ytUD (via @earlyeditionapp)

  18. False Economy

    RT @wdjstraw Great summary by Howard Reed of all the evidence showing that we're NOT all in this together http://bit.ly/igQqSF

  19. Lynn Hancock

    RT @leftfootfwd: Are we really all in it together? http://bit.ly/fIR1Hs <— important analysis – please retweet.

  20. Cindie Reiter

    RT @leftfootfwd: Are we really all in it together? http://bit.ly/fIR1Hs

  21. matthew fox

    Is it me, or Anon E Mouse is being sarcastic?

  22. Diane Hain

    RT @leftfootfwd: Are we really all in it together? http://bit.ly/fIR1Hs. The less you've got the more you're being hurt by the savage cuts.

  23. Redhill Against Cuts

    RT @leftfootfwd: Are we really all in it together? http://bit.ly/fIR1Hs

  24. DarkestAngel

    RT @lynnhancock: RT @leftfootfwd: Are we really all in it together? http://bit.ly/fIR1Hs <— important analysis – please retweet.

  25. Deb

    RT @lynnhancock: RT @leftfootfwd: Are we really all in it together? http://bit.ly/fIR1Hs <— important analysis – please retweet.

  26. gwenhwyfaer

    RT @leftfootfwd: Are we really all in it together? http://bit.ly/igQqSF by Howard Reed

  27. gwenhwyfaer

    “there are writers at LFF who seemingly do not believe that there is any issue arising from nigh-on 70% state-sector employment, which generates neither profit nor tax”

    …But that wasn’t always true, was it? I seem to remember a time when the state owned things which could, and did, generate both profit and tax… until the prevailing ideology decided that the only way to ensure that the state stayed off the backs of its subjects was to forbid it from ever being able to generate its own income and force it to rely entirely on picking those subjects’ pockets at gunpoint…

    …no, I don’t get it either. Like so much right wing ideology-dressed-as-economics, it just doesn’t make any *sense*.

  28. Mr. Sensible

    13eastie, it would be handy if the government had a growth strategy that actually worked, in order for the private sector to create jobs.

    But business doesn’t believe in the government’s growth strategy.

    Even the minister in charge of the government’s growth strategy doesn’t believe in the government’s growth strategy!

    At any rate Howard, what’s the betting that Osborne will scrap VAT on Highschool Musical merchandise in March?

  29. david

    RT @leftfootfwd: Are we really all in it together? http://bit.ly/fIR1Hs No, some of us are up shit creak without a paddle…

  30. GoldAnthUncut

    Are we really all in it together? | Howard Reed | http://bit.ly/fIR1Hs

  31. Kevin Richards

    Ask yourself the question: Are we really all in it together? http://bit.ly/fIR1Hs RT @leftfootfwd

  32. not in it together

    “whole regions have, through hopelessly ‘targeted’ Labour funding, been discouraged from engaging in enterprise and thereby joining the productive part of the economy”

    Where is your evidence for this? There are areas that businesses are simply not interested in. In Wales a large proportion of the population is employed by the public sector because unemployment rates are really high and there is nothing else on offer. Wasn’t it your Maggie that closed down the mines? Whole communities have still not recovered and the current government is not doing anything to help.

    Also, what is your definition of a “productive part of the economy”? I’ll have a nurse or a teacher any time over a banker. What exactly are they producing? Greed, recession and economic destruction?

  33. Martyn

    RT @nicolatuc: RT @leftfootfwd: Are we really all in it together? Howard Reed shows we're not http://bit.ly/fIR1Hs

  34. Greg

    RT @leftfootfwd: Are we really all in it together? http://bit.ly/fIR1Hs

  35. Tim Holmes

    How the cuts are going to deepen inequalities across income deciles, gender, localities and regions: http://bit.ly/igQqSF

  36. Samir Jeraj

    RT @timbird84: How the cuts are going to deepen inequalities across income deciles, gender, localities and regions: http://bit.ly/igQqSF

  37. Michelle Gowans

    RT @Cindie_Reiter: RT @leftfootfwd: Are we really all in it together? http://bit.ly/fIR1Hs

  38. Daniel Pitt

    RT @leftfootfwd: Are we really all in it together? http://bit.ly/igQqSF by Howard Reed

  39. Richard

    Don’t you have a job to do in the daytime either Mickey? You troll all day long. Some benefits you must be sponging.

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