I am no economist, but i have known, since 22 june, that his budget is regressive and i am disappointed that the IFS have taken 2 months to work this out. Immediately after the budget, the media-led narrative, convinced most people, that there should be cuts, when it was just the tories taking the opportunity of a lifetime, being able to blame labour and with the lib dems blessing. Cutting public spending doesn't affect the rich,as they do not use them, and the rise in vat has quite clearly hit the poor hardest.

As one has asserted on previous blogs... were it not for the ignorant poor we would not have suffered thirteen years of NuLiebour government.
This be payback time... BIG TIME !

re: ang. Pirate ? Nope... SCROUNGER !

There'll definitely be no change of tack with this shower.

George Osborne has regularly praised the IFS as a 'much respected, independent institute' but now we hear this report is 'selective' and 'the Treasury stands full square behind it's budget analysis which is based on what can accurately and completely be measured'.
It's selective apparently because it 'doesn't allow for households returning to work and reductions in corporation tax'

Osborne is surely showing selectivity himself then as in his budget he projects hypothetical figures for the numbers that will return to work when most believe there will be fewer jobs and more people in unemployment,and regarding corporation tax - doesn't that disproportionately benefit the well off and not the poor?

I suggest the Treasury's own defence and argument is selective as was the Budget by the very nature of it's cuts and effects.

Needless to the say the Treasury 'denies these latest figures'. They would, because they are simply another nail in the coffin of this heartless lot. I thought this lot was all about listening to people in the know, seemingly that only extends to the likes of Philip Green rather than the IFS then?

Osborne & Co's downfall will be denials of evidence based findings because they have not got the economic experience to disprove them.

It's just rubbish Lou, how can that man turn around and say the IFS 'didn't factor in people coming off benefits and taking up work'. What work? Where does he think these jobs are? A few weeks ago Cameron was telling us all the only jobs would be unpaid in his blessed 'big society'! This lot are just unbelievable, how can anyone not see they have not got the first clue?

It's just a shame that they brainwash people into believing them, like so many of the deluded who post on here!

It's a little odd how Howard, Letwin and co were very reliant on IFS predictions in the 2003 budget impact predictions when casting doubt upon Labour's economic strategy? Seems when the IFS's evidence isn't so helpful it stangely becomes an unreliable source upon which to judge this lot.

The coalition of spin can't admit to being wrong on a single thing can they.

I always enjoy the nick and lou show, quality comments every time, I just wish more people understood. This coalition seems keen to get labour mps on board, to help in tricky situations, so how about hiring alistair darling as chancellor, after all he was steering us quite nicely out of the recession. Osborne is clearly out of his depth and has said 'talk to the hand' to the IFS, he's gone mad! Maybe someone could lock him in a cupboard while alistair sorts it.

I agree with @Nick!

The only way for Treasury to quibble the IFS report is to beg the question, big time. The hamster wheel in Osborne's head goes:

"Cutting spending and CT creates jobs. This budget cuts spending and CT. Therefore jobs will be created."

Other posters have cited Kruman, Stiglitz who offer brillient analyses on this orthodoxy: http://krugman.blogs.nytimes.com/

There is little evidence that staggered cuts in CT will do any more in a stagnant or deflationary marketplace than deliver a windfall to large companies, which they are most likely to hoarde or distribute by dividend by way of insulation from a lack of effective demand. After all, banks got all the stimulus they need, and they're not lending! Why should companies be any more magnanimous?

Osborne has previously given the impression he is so attuned to the bond market that he can decode every cough or murmur from the cassandras at Fitch, Moody's and co, but when gilt yields plunge month on month and billions are withdrawn from equity markets this doesn't generate any comment from the coalition at all.

To keep the hamster wheel turning Osborne gives a misleading summary of the latest letter from Mervyn King:

Osbourne (17 Aug): "Inflation is proving more persistent than expected, as the Bank of England Governor explained in his letter to me this morning."

http://www.conservatives.com/News/News_stories/2010/08/~/link.aspx?_id=C...

King (16 Aug): "The MPC's assessment is that much of the current high level of inflation can be attributed to the
increase in VAT in January 2010, past rises in oil prices and the continued pass-through of higher
import prices following the depreciation of sterling since mid-2007. The MPC's central judgement
remains that these effects will prove to have a temporary impact on inflation, and are masking the
downward pressure on inflation from spare capacity within companies and the labour market."

http://www.bankofengland.co.uk/monetarypolicy/pdf/cpiletter100817.pdf

How tortured does the Treasury's spin have to get before Lib Dems muster the testicular fortitude to act in the interests of their electors?

@tom O'Gara. Thats exactly what the treasury said today in their defence. That the IFS had failed to factor in all the imaginary jobs!

should have said that the £21 is what I get for housing per week

i've just been reading in the guardian clegg saying that this ifs report is partial as it doesn't include what the coalition "want to happen", ie.that more people on benefits will find work. a very interesting concept, that the IFS should include "wishful thinking" in their calculations. and to not do so makes the report "partial".

I suppose the calculations that the budget is progressive must have been based on inaccurate predictions for figures on unemployment, and growth. Though its hard to prove as yet, that they are inaccurate. Though there is an interesting trend in rising part time work, which is actually quite heavily subsidised by the tax payer. which may be why, as employers are, instead of making people redundant, making them part time.

Obliged to you Ehtch for providing the link to the report,it shows the extent of what this lot has got in mind. God help anyone if they are poor, disabled or unfortunate enough to lose their jobs. To force people into poverty by cutting jobs is bad enough, to then give them a good kicking when they are down is just shameful.

Here's Clegg on 29 April 2010, before he changed his tune.

"I was really delighted at the
Institute of Fiscal Studies when they compared the three parties' manifestos this week said
very, very clearly, and very directly, that our proposal to lift the income tax threshold to
£10,000 is the best incentive to work."

http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/30_04_10_finaldebate.pdf

Even this gives an incomplete picture. Cuts in services and job losses will all hit the poorest proportionately harder than the richest. The stagnation in growth or even the second recession caused by the cuts will hit the poorest proportionately harder than the richest. The rise in inequality caused by these measures will by definition hit the poorest harder than the richest.

Recall that even if everyone across the income/wealth scale lost by say 5%, that would still be regressive because the poorest can afford those losses far less than the richest.

Add the fact that this is all being done to pay the costs of a crisis created by people in the very wealthiest strata of society, and you see this for what it is: one of the greatest social injustices of the modern era in domestic British politics.