10 Lies the Coalition are telling about the Economy #5

tumblr_lprr8475bY1r1vdclo1_500LIE #5

The Emergency Budget was progressive as more of the impact will be felt by the better off, with the poorest protected


“[The Budget]..is tough, but it is also fair”
“It is a progressive budget”
“…we have ensured that the burden is fairly shared”
“Overall, everyone will pay something, but the people at the bottom of the income scale will pay proportionally less than the people at the top.”
“The richest paying the most and the vulnerable protected. That is our approach.”
(Source: George Osborne, Budget Speech, 22 June 2010)

“this government will not cut this deficit in a way that hurts those we most need to help…”
(Source: David Cameron speech, 7 June 2010)

“the policies in this Budget, taken together, will not increase measured child poverty over the next two years.”
(Source: George Osborne, Budget Speech, 22 June 2010)

TRUTH: 

Independent analysis (from the Institute for Fiscal Studies) shows that the Osborne Budget is profoundly regressive and has a disproportionate impact on the poor compared to the rich. It is already clear that the ConDems want to protect the Tories’ rich friends at the expense of ordinary people. The budget cut progressive taxes like income tax (where the rich pay more as a % of their income) while increasing regressive taxes like VAT (where the poor pay more as a % of their income).

A report by respected independent think tank The Institute for Fiscal Studies (IFS), commissioned by the Child Poverty Action Group, said that unemployed couples with children will suffer most from tax rises and benefit cuts, losing about 8.5% of their income over four years. Families with one working parent will experience an income drop of more than 5%.

The IFS Report says that “many of the progressive tax rises that will be introduced over the next two years were announced by the previous Government, and that the Budget measures scheduled to come in between 2012 and 2014 are generally regressive.”

The IFS also say in their report that the “distributional analysis” produced by Osborne to justify his claims that the Budget was progressive did not include the impacts of several key changes such as cuts to housing benefit and tax credits and was therefore not accurate.

Incidentally, Osborne himself regularly cited the IFS when criticising Labour Budgets of the past:
“I am waiting for the Institute for Fiscal Studies’ analysis.” George Osborne, 26 March 2010
[The IFS is a] “much respected independent insitute.” George Osborne, 5 April 2005
“an independent report by the respected IFS” George Osborne, 31 January 2008

On 9 September 2010, two weeks after their report criticising Osborne, Robert Chote, the Director of the Institute for Fiscal Studies was appointed as the new Head of the Office of Budget Responsibility.

From Howard Dawber

www.howarddawber.org.uk

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