Nick Clegg has decided to go on the offensive against the Institute for Fiscal Studies analysis which shows that, despite Coalition claims that ‘the broadest shoulders are bearing the greatest burden’ and that the Comprehensive Spending Review’s slash and burn of public services is ‘progressive and fair’, the poorest 10% of society will be hit the hardest. He claims that the IFS has failed to take into account the full package of measures as outlined in the Emergency Budget in June as well as the CSR. Would these be the measures which the IFS found, at the time, to be ‘clearly regressive’ taken on their own and only ‘progressive’ when taking into account the tax and benefit proposals of the departing Labour government?
Iain Duncan Smith tried another tack yesterday. The IFS models, he claimed, were factoring in all sorts of assumptions such as changes to housing benefit; Carl Emmerson, the acting Director of the IFS, confirmed that the difference between the Treasury’s figures and the IFS ones is a result of the Treasury leaving out any impact from changes to housing benefit and the like. This is like punching someone in the face twice and claiming that only the first knock counts.
The IFS response is a simple one: firstly, it would be absurd to claim that such changes will have no impact whatsoever, and insofar as the changes to housing benefit, for instance, are calculable and quantifiable, estimates can be made as to their impact and factored into the models. Moreover, it doesn’t take a genius to work out that changes to housing benefit disproportionately affect the poor, since these make up the overwhelming bulk of those claiming it. The same is true of public services as a whole – it is the poor who need them most, so it is they who will feel the cutbacks the most.
But do we really need complex mathematical models to understand the truth of this? Here is Alison Seabeck writing in Comment is Free today about the effect of tying social housing rents to those of the private sector so that Councils and Housing Associations will now be able to charge 80% of the average weekly market rent, as announced in the CSR on Wednesday, ‘Across England as a whole, 80% of the average weekly market rent for a three-bedroom property is £249, which rises to £350 in London. The comparable social rents are £84.56 across England and £110 in London. Social housing providers are likely to be given greater freedom to choose their tenants and we could see low-income families, the unemployed and vulnerable excluded from new social lettings because they can’t meet the average extra £8,550 a year for a home across England or the average extra £12,480 in the capital.’
Or, to put it another way, the most hard pressed and vulnerable families may have to find the funds to cover a nearly 200% rise in social rents nationwide, more than 200% in London, or as is most likely either become homeless or take substandard accommodation in the housing black market – in unregulated, dangerous and usually filthy accommodations that are not properly maintained. Is this fair or progressive?
And there’s another problem for Clegg and the Coalition. Their own figures, released with the CSR documents, show that apart from the top 2% of the population, it is the bottom 10% that will be hardest hit by the announcements in the CSR. You can see the graph at the bottom of this BBC report.
Steve Bell rather amusingly caricatures Clegg as a pinochhio type boy-figure. Once this seemed appropriate because he seemed so innocent. Now it seems appropriate because he just can’t stop telling lies. How much longer can this Pinocchio of British politics let his nose grow before he topples over?