This week’s alarming Institute for Fiscal Studies report – which resoundingly and rightly classes the ConDem’s June budget as regressive – sadly confirms our earlier analysis. Previous research undertaken by the TUC and others has revealed that the budget and the £6.2 billion worth of cuts announced in May will hit the most vulnerable and the poorest hardest.
A TUC report has combined the distributional impact of spending cuts announced in the budget with the impact of the budget’s tax and benefit changes to calculate the overall impact of both. The report reveals that the average annual cut in public spending on the poorest tenth of households is £1,344, equivalent to 20.5 per cent of their household income, whereas on richest tenth of households it is £1,135, equivalent to just 1.6 per cent of their household income.
The ConDems may attempt to pull the wool over our eyes by saying that the richest have been hit hardest, but we should not be fooled. The annual loss in income and services may be £2,685 for the richest households and £1,514 for the poorest but this is the equivalent to just 3.6 per for the richest and a massive 21.7 per cent for the poorest. ConDem protestations of a fair budget and protecting the vulnerable look hollow in the face of these facts.
But it does not stop there. Women will bear a disproportionate burden of the cuts outlined in the budget. Even if we exclude cuts to support for children – which is being slashed by £2.4bn including cuts in Sure Start, maternity grant, health in pregnancy grant, child benefit and tax credits, mainly paid to women – a gender audit of the budget shows that women still pay £3.6bn of net personal tax increases/benefit cuts, compared to that of men who pay £1.9bn. This owes to the fact that women are more profoundly affected by things like housing benefit cuts and the switch to CPI rating rather than RPI of the additional state pension and public sector pensions. It is also worth noting that an extra £560 million cut from the Child Trust Fund is not included in the gender audit.
Moreover, many ConDem cuts will also fall disproportionately on children, the elderly, those suffering from long term illness, disabled people and the unemployed. Thirty of the cuts in the £6.2 billion package announced in May specifically impact on these most vulnerable groups, cuts which include: a programme to support children with reading difficulties; plans for building school playgrounds; an affordable housing programme; free prescriptions for everyone with a long term health problem in England; free social care to 11,000 older people; and the ‘Building Schools for the Future’ refurbishment programme of hundreds of schools across the UK.
This is aside from other high profile cuts such as the Future Jobs Fund – a programme that has created jobs and opportunity for hundreds of thousands of previously out of work young people.
They say actions speak louder than words – the ConDem coalition may lay claim to be about a new kind of politics but a budget that so devastatingly hits the most vulnerable hardest makes all too clear that this coalition is about the very old politics of divide and rule. Union and Labour Party members need to fight back in the name of a fairer and more just society.
Diana Holland is Assistant General Secretary – Equalities at Unite and is a candidate for Labour Party Treasurer.