Alison Garnham of the Child Poverty Action Group, challenges the coalition to defend how the distributional analysis of their tax and benefit changes is fair.
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Alison Garnham is the chief executive of the Child Poverty Action Group
The information presented in the charts below comes directly from government.
Chart 1: The fair deficit reduction we were promised:
Chart 2: What we got:
Chart 1 presents what the cuts impact might look like if it is shown to be progressive across the income distribution – a common sense view of what ‘fairness’ means; Chart 2 presents what the government is actually doing.
Chart 2 is reproduced from the government’s own distributional impact analysis and you can find it on page 3 of the “Impact on households: Distributional analysis to accompany the Autumn Statement 2011” document (pdf) they published in November 2011.
It proves that two of the government’s key claims about deficit reduction cannot be sustained:
1. “The deficit reduction will be fair; and those with the broadest shoulders will carry the greatest burden.”
2. “We have no choice but to make cuts to welfare benefits and tax credits because of the state of the nation’s finances.”
For the first claim, it is certainly true the richest 10% of the population are shouldering the greatest burden as a proportion of income. But after that it all goes horribly wrong. The rest of the chart is pretty much completely regressive. People from the poorest third of the population are shouldering a greater burden than four out of every five people in the richest half of the population.
This is not the common understanding of fairness.
The second claim is regularly used when ministers are reminded of warnings from the Institute for Fiscal Studies (IFS) that their approach to deficit reduction threatens to increase child poverty by 400,000 children over the current parliament.
• Autumn statement 2011: “We’re all in this together” – when ‘we’ means the bottom 80% 29 Nov 2011
• Budget 2011: Distributional analysis of coalition’s major tax changes 24 Mar 2011
• How the government lost the fairness argument 8 Jan 2011
• CSR 2011: IFS: Tax and benefit changes are regressive 21 Oct 2011
• CSR 2010: Osborne’s fairness claims fall flat. Again 20 Oct 2010
• IFS: Osborne’s Budget is “clearly regressive” 25 Aug 2010
• Emergency budget 2010: IFS: Budget was “regressive” 23 Jun 2010
But there is a choice. There is tremendous room for manoeuvre by increasing the proportion of income contributed from deciles six, seven, eight and nine. Given that their incomes are much larger than the lower deciles, a relatively small rise in their contribution could allow for a large fall in the contribution from the lower deciles.
Please share this graphic with anyone who is defending low income families against the cuts as evidence that there are other options for the government in next week’s budget.
59 Responses to “The charts that shame the “we’re all in this together” coalition”
Anonymous
Now do it for real hard cash money.
Nothing like distorting the measure and using pennies at one end, and millions at the other end.
As for the basic cause, there is no choice.
You left debts of 7 trillion, and someone is going to pay for that mess.
Most of it will be pensioners.
Anonymous
“The deficit reduction will be fair; and those with the broadest shoulders will carry the greatest burden.”
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Lets see. We should jail aggrophobics, because they are best able to carry the burden of incarceration.
Personally, I want those responsible for the mess to bear the cost.
I don’t want those who weren’t responsible to bear any of the cost.
Failed bankers to lose their jobs.
Politicians responsible for the mess, and the supporters, to take the hit.
After all, if you cause the mess, you should pay for the clean up.
So how are you going to pay my share of the 225,000 government debt?
Nigel Wootton
The poorest and lowest wage earners are shouldering the brunt of the Coalition’s so-called “deficit reduction,” which they promised would be borne “by those with the broadest shoulders.” I have to question the very existence the Coalition’s “deficit and debt reduction” strategy that they have constantly drummed into our heads. Tax-dodger Osborne has increased the “deficit” (that is, the National Debt) by £180 billion since he took his office as Chancellor, and has pushed it above the £1 trillion mark. The UK’s credit rating is subsequently under threat, and if lowered in the future it will be prohibitively expensive and to pay off the UK’s debts.
The Coalition insists it is necessary to make £83 billion in rolling cuts to public services, councils, the military, welfare, tax-credits and charities. Osborne has so far delivered only 16% of those cuts, and we will find out how much more in his Budget on Wednesday. The Coalition insists persistently that its cuts are necessary to reduce “debt” and “the deficit.” The Coalition blames Labour, the Eurozone, and benefit claimants for their soaring “deficit” problem – for which they blame anybody or anything but themselves. I suggest that the best way to get debt down and avoid swingeing debt repayments is to remove the government. After Osborne’s budget, people will be looking at their family budgets and assessing how they can afford to pay their bills. After the pain of this, people should ask themselves “Do I deserve it?” and “Who do I want to vote for next time?” The Guardian, the Telegraph and the University of East Anglia all believe that the Coalition will not last its term until 2015, and that its days are numbered.
Why are the cuts necessary, then? The Coalition’s rolling cuts are designed to pre-empt public services and councils to outsource services already paid for by the taxpayers to private contractors and companies, to whom the public have to pay fees. The Coalition’s agenda behind closed doors is to privatise the entire public sector in order to sell to each-other and their political donors for huge profits, while the public have to survive on workfare, static wages and salaries, and spiraling costs in order to stay alive. The Coalition is in denial about its privatisation agenda, but daleks out so many lies and fudged figures who wants to believe a single word they say any more. Here’s the whopper of the century from David Cameron in order to get elected: “I’ll cut the deficit, not the NHS.” Would anyone else like to post one or two Coalition whoppers?
Newsbot9
Ah right, so you’re admitting tax evasion. Neat-o. Time to call that in.
Newsbot9
Funny, it’s almost like someone who struggles to afford food being hurt by “pennies” (a significant part of his income). But hey, it’s not like the poor are human, there’s no choice but to starve and freeze them…why, anything else might hurt your feral 1%!