Emergency Budget ‘hit poor hardest’
George Osborne’s emergency Budget hit the poorest hardest, a leading economic think-tank has said.
The Institute for Fiscal Studies (IFS) concluded that the biggest losers from the measures announced by the Chancellor in June were low income households with children.
The report was seized on by Labour, with shadow work and pensions secretary Yvette Cooper accusing the Government of carrying out a “shocking and unfair attack on children and families”.
But the Treasury said it “does not accept” the IFS analysis, claiming the report was selective in what Budget measures it had included.
The IFS study found that the poorest six tenths of households lost more in cash terms as a result of the Budget’s changes than wealthier households in all but the richest 10%.
The report found Mr Osborne’s tax and benefit changes between June 2010 and April 2014 will cost the poorest 10% of households, those in the first decile group, £422.83.
But those in the ninth decile group would only find themselves £339.12 worse off.
The report builds on earlier IFS analysis of the Budget, which indicated that Mr Osborne’s claims it was progressive – hitting the rich harder than the poor – was mainly down to changes previously announced by Labour.
The new study, part-funded by the End Child Poverty campaign, attempts to reflect the impact of all the benefit cuts announced in the Budget.
“Our analysis shows that the overall effect of the new reforms announced in the June 2010 Budget is regressive, whereas the tax and benefit reforms announced by the previous government for introduction between June 2010 and April 2014 are progressive”, the report said. “Low-income households of working age lose the most from the June 2010 Budget reforms because of the cuts to welfare spending.”