The coalition’s changes have cost the average family more than £1,000 a year. Photo: Getty
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IFS report dispels Osborne’s myth that we’re “all in it together”

Middle to higher income households, according to a report from the Institute for Fiscal Studies, have actually escaped “remarkably unscathed” from the coalition’s austerity drive.

Low-income families with children have bore the brunt of the coalition’s austerity drive, according to a report this morning by an independent economic think-tank.

The report, by the Institute for Fiscal Studies (IFS), suggests that the coalition’s tax and benefit changes have cost the average family more than £1,000 a year. It also adds that the richest tenth have lost out significantly in cash terms, though not as a percentage of income.

Interestingly, it can be taken from the report that Osborne’s mantra of we’re “all in it together” is little more than a myth: middle to higher income households have actually escaped “remarkably unscathed” from the coalition’s austerity measures, according to the IFS. And those in the same wage bracket, without children, have been left better off as a result of the coalition’s tax and benefit changes. But for middle and higher income families with children, the loss of tax credits and child benefit “has more than offset the effect of income tax cuts”.

Pensioners were relatively unaffected, on average, as the hike in VAT largely offset their gains from the “triple lock” on the state pension.

Cathy Jamieson, Labour’s shadow treasury minister, said today that the report shows that tax and benefit changes under the coalition have left households £1,127 a year worse off on average. Jamieson said: “Families with children have been hit hardest of all by David Cameron’s choices – a clear betrayal of his promise to lead the most family-friendly government ever.

“For all the government’s claims, this report shows that they have raised tax by over £13.5bn a year. And for millions of working people the rise in VAT and cuts to things like tax credits have more than offset changes to the personal allowance.

“It is clear working people can’t afford five more years of this government.”

Responding to the IFS briefing note a spokesperson for HM Treasury said:

[The report] confirms that the richest have lost the most from the Government’s changes to taxes and welfare. Treasury analysis has shown that throughout the parliament that the richest 10 per cent of households have made the largest contribution to reducing the deficit. The Treasury presents the most complete, rigorous and detailed record of the impact of this government's policies on households. At Autumn Statement this confirmed that the richest 20 per cent of households will contribute more to reducing the deficit than the remaining 80 per cent put together.”

But no mention from the Treasury of those low-income families mentioned in the IFS report. While the government claims the richest have made “the largest contribution” in reducing the deficit, the poorest have actually lost the greatest percentage of their income. The coalition’s sustained attack on the most vulnerable people in society through its relentless austerity drive has left the poorest families on the verge of destitution - but, according to the Treasury, the “richest have lost the most”. 

James Browne, a senior research economist at IFS and co-author of the report said: “Whichever way you cut it, low-income households with children and the very richest households have lost out significantly from the changes as a percentage of their incomes.”

“Increases in the tax-free personal allowance have played an important role in protecting middle-income, working-age households meaning that those without children have actually gained overall.”

Ashley Cowburn writes about politics and is the winner of the Anthony Howard Award 2014. He tweets @ashcowburn

 

 

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As the strangers approach the bed, I wonder if this could be a moment of great gentleness

I don’t know what to do. In my old T-shirt and M&S pants, I don’t know what to do.

It’s 1.13am on an autumn morning some time towards the end of the 20th century and I’m awake in a vast hotel bed in a small town in the east of England. The mysterious east, with its horizons that seem to stretch further than they should be allowed to stretch by law. I can’t sleep. My asthma is bad and I’m wheezing. The clock I bought for £3 many years earlier ticks my life away with its long, slow music. The street light outside makes the room glow and shimmer.

I can hear footsteps coming down the corridor – some returning drunks, I guess, wrecked on the reef of a night on the town. I gaze at the ceiling, waiting for the footsteps to pass.

They don’t pass. They stop outside my door. I can hear whispering and suppressed laughter. My clock ticks. I hear a key card being presented, then withdrawn. The door opens slowly, creaking like a door on a Radio 4 play might. The whispering susurrates like leaves on a tree.

It’s an odd intrusion, this, as though somebody is clambering into your shirt, taking their time. A hotel room is your space, your personal kingdom. I’ve thrown my socks on the floor and my toothbrush is almost bald in the bathroom even though there’s a new one in my bag because I thought I would be alone in my intimacy.

Two figures enter. A man and a woman make their way towards the bed. In the half-dark, I can recognise the man as the one who checked me in earlier. He says, “It’s all right, there’s nobody in here,” and the woman laughs like he has just told her a joke.

This is a moment. I feel like I’m in a film. It’s not like being burgled because this isn’t my house and I’m sure they don’t mean me any harm. In fact, they mean each other the opposite.

Surely they can hear my clock dripping seconds? Surely they can hear me wheezing?

They approach, closer and closer, towards the bed. The room isn’t huge but it seems to be taking them ages to cross it. I don’t know what to do. In my old T-shirt and M&S pants, I don’t know what to do. I should speak. I should say with authority, “Hey! What do you think you’re doing?” But I don’t.

I could just lie here, as still as a book, and let them get in. It could be a moment of great gentleness, a moment between strangers. I would be like a chubby, wheezing Yorkshire pillow between them. I could be a metaphor for something timeless and unspoken.

They get closer. The woman reaches her hand across the bed and she touches the man’s hand in a gesture of tenderness so fragile that it almost makes me sob.

I sit up and shout, “Bugger off!” and they turn and run, almost knocking my clock from the bedside table. The door crashes shut shakily and the room seems to reverberate.

This article first appeared in the 12 January 2017 issue of the New Statesman, Putin's revenge