So who pays?

When forced to find new resources, the coalition's instinct is to take them from low-to-middle incom

Just in case you were under any doubt about where the burden of today's widely expected cuts to tax credits will fall, the chart below should make it clear. Over 75 per cent of the pain of today's changes to tax credits is felt by the bottom half of the income distribution. The vast majority of these from families with children.

graph

The decision to scrap the planned increases in Child Tax Credit (hitherto the coalition's one emblem of its commitment to tackle child poverty), together with other cuts to Working Tax Credit, will mean more than £1.2bn of cuts in 2012.

The changes to the child tax credit will mean families lose the extra £110 per child that they had been expecting in 2012; and the freezing of the Working Tax Credit will reduce the incomes of working families by a further £100. How many will be affected altogether? Around 5.5 million families will lose as a result of the changes to child tax credit, with 2 million facing a double hit because of the working tax credit changes.

This latest squeeze on family finances comes on top of a raft of other already announced cuts to tax credits, many of which don't bite until April 2012. Together they add to up to approximately £2.9 billion of cuts in 2012-13, roughly 10 percent of the total tax credit budget.

There were actually a number of relatively small announcements that should be welcomed today - above all the doubling of childcare places for disadvantaged two year olds. But the wrong people where paying for this.

If you really want to unpick what is going on in politics -- above all on the day of spending announcements -- it is always best to ignore the words spoken and instead follow the detail of the choices made. Today revealed one thing above all else -- when put in a corner, and forced to find new resources, the coalition's instinct is clear: take them from the tax credits going to low-to-middle income families.

Gavin Kelly is a former adviser to Downing Street and the Treasury. He tweets @GavinJKelly1.

Photo: Getty
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Fight: Arron Banks versus Mary Beard on the fall of Rome

On the one hand: one of Britain's most respected classicists. On the other: Nigel Farage's sugar daddy. 

Tom Lehrer once said that he would quit satire after Henry Kissinger – him of napalm strikes and the Nixon administration – received the Nobel Peace Prize.

Your mole is likewise minded to hand in hat, glasses and pen after the latest clash of the titans.

In the blue corner: Arron Banks, insurance millionaire and Nigel Farage’s sugar daddy.

In the red corner: Mary Beard, Professor of Classics, University of Cambridge, documentarian, author, historian of the ancient world.

It all started when Banks suggested that the fall of the Roman Empire was down to…you guessed it, immigration:

To which Beard responded:

Now, some might back down at this point. But not Banks, the only bank that never suffers from a loss of confidence.

Did Banks have another life as a classical scholar, perhaps? Twitter users were intrigued as to where he learnt so much about the ancient world. To which Banks revealed all:

I, Claudius is a novel. It was written in 1934, and concerns events approximately three centuries from the fall of Rome. But that wasn't the end of Banks' expertise:

Gladiator is a 2000 film. It is set 200 years before the fall of Rome.

Your mole rests. 

I'm a mole, innit.