Austerity Without Impoverishment?


The road to hell is paved with good intentions. Few doubt the sincerity of Lib Dem members of the Government: they do genuinely wish to be fair and to reduce  poverty, especially among children but outcomes depend on the implementation of the right policies not Conference resolutions. These thoughts are prompted by a report of the Institute For Fiscal Studies (IFS) which concludes that as a result of fiscal measures take by the Coalition todate the poorest families will lose five times as much as richer childless families, as a percentage of their annual income,  over the next four years.

The debate about this  will need to address a central dilemma, The question is:  when real incomes fall, as they will over the next four years, can you protect the poor and vulnerable? No, you can’t. The popular ditty is right: ‘the poor get poorer and the rich get richer.’ But you can alleviate the impact of fiscal constriction. The burden of cuts cannot all be borne by the public sector for poor people are more dependant on them and the incidence of tax increases must not fall unfairly on the poor. The case against the VAT increase, despite the increasingly sophisticated reasoning in its favour, is a case in point.

The Lib Dems cannot prevent unfairness by talking the talk. The truth is that they have sold out. They are committed to support Tory policies to eliminate the budget deficit in four years and mainly by swinging cuts in public services. You can’t help the poor by contracting the economy, reducing their chances of a job, and  slowing the growth of national income. Chickens will come home to roost. If you are patient and wait a short time you will see them return.

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Filed under Alan Budd, BBC, Big society, Cabinet, Cameron, Child poverty, Coalition Government, Financial Times, Guardian, IFS, Labour Blogs, Lib Dem blogs, Liberal Voice, New Stateman, Parliament, Politics, Poverty, Social justice, Statistics, Treasury

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