Independent assessments of the Budget Report

As background to the Budget, the Institute for Fiscal Studies (IFS) published a summary of recent analyses looking at the likely trends in household incomes over the next few years and, in particular, how they are likely to be affected by tax and benefit changes that are currently planned for 2012/13 (see IFS Briefing Note BN126). This found that households with children will lose most from tax and benefit changes in the coming year (see IFS press release).

The IFS also looked at the impact of changes to the tax threshold and the aim of increasing the personal tax threshold to £10,000 (see A £10,000 tax allowance: who would benefit, and would it boost the economy?). The IFS concludes:

the common assertion that increasing the personal allowance is progressive is true if one considers the gains across individual income taxpayers. It is not true if one considers the gains across all families as relatively few of the poorest families contain a taxpayer and two-earner couples gain twice as much in cash terms as one-earner families.

The IFS post-budget impact analysis can be found on the IFS website. The IFS finds that the overall impact of all measures introduced by the Coalition is broadly regressive, but when the full impact of Universal Credit is included, the winners and losers are more evenly distributed across the income spectrum.

The Women’s Budget Group has analysed the impact of the budget on women (see Women ‘hit worst’ by austerity measures[JM1] ). Their analysis concludes that the budget will undermine gender equality in the UK. Their report points out that the above inflation increases in the personal tax allowance does not help those with no earnings or those whose earnings are below the threshold. The report emphasises that the budget must be seen in the context of an increasing squeeze on public spending, cuts in public sector services; loss of public sector jobs; and the public sector pay freeze and the prospect of further falls in public sector pay in the poorest regions. See: the Women’s Budget Group website.

See also:

Other reactions on the impact of the Budget on poverty: The Budget 2012: What an anti-climax and The Budget 2012: Missed opportunities (available on the Joseph Rowntree Foundation website).

The Resolution Foundation and Left Foot Forward also have analyses of the Budget.

Child and adult poverty set to rise by 2015, a report on the forecast by the Institute for Fiscal Studies in Child and Working-Age Poverty from 2010 to 2020.

The Budget 2012 Report and background details can be found on the Treasury website.

 [JM1]This will be an internal link to 29 March 2012          

Women 'hit worst' by austerity measures