Families the big losers in the spending review, says IFS

Families with children are the biggest losers in the spending review, according to an analysis by the Institute for Fiscal Studies.

Families with children are the biggest losers in the spending review, according to an analysis by the Institute for Fiscal Studies.

It says that those who are least affected by the tax and benefit reforms are those of working age without children in the upper-middle of the income distribution.

Analysis by James Browne shows that overall the richest tenth lose most, but because of tax rises agreed by Labour.

New measures introduced by the Coalition Government will hit poor families most, he says. The Treasury says the package of tax and benefit reforms to be introduced by 2012-13 is progressive for most people. The IFS disagrees. Browne says: “Reforms by 2012–13 are slightly regressive or flat within the bottom nine-tenths of households. Reforms by 2014–15 are more clearly regressive within [the] bottom 90% [of households]”. 

Browne says: “The Treasury said that reforms will not increase relative child poverty over next two years. Maybe, but what about future years?”

He adds that the analysis omits cuts in public services which will hit the poor hardest.

Liberal Democrats leader Nick Clegg hit out against the IFS on Friday, saying its analysis ignored factors such as access to public services and social mobility.

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