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'Britain poor-rich gap to widen further'
Sun, 27 Jun 2010 10:12:50 GMT
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Prominent experts in Britain have warned that the coalition government's budget would hit the poor harder than the rich.
Leading experts on tax and spending from the Institute for Fiscal Studies (IFS) have strongly challenged Chancellor of Exchequer, George Osborne's claims that the budget he delivered was "tough but fair".
Robert Chote, the IFS director said that Britain was facing the "longest, deepest, sustained cuts in public spending since the second World War".
He said, "Osborne and deputy premier Clegg have been keen to describe the emergency package as progressive in the sense that the rich will feel more pain than the poor. That is a debatable claim. The budget looks less progressive - indeed somewhat regressive - when you take out the effect of measures that were inherited from the previous government, when you look further into the future than 2012-13, and when you include some other measures that the Treasury has chosen not to model."
The IFS said its estimates show the poorer families will feel the burden in the second half of the parliament when welfare cuts begin to affect and the two-year increase in child tax starts to vanish.
Yvette Cooper, the shadow work and pensions secretary, affirmed the IFS estimates noting that " George Osborne's budget was a typical Tory budget - unfair and hitting those on lower incomes hardest".
The IFS said the richest 10% would be 7.5% worse off by 2014-15 as part of the coalition government's measures and the poorest 10% would see their income slashed over the next five years.
The IFS director noted that the looming cuts to public services will likely hit pooper households more significantly harder than richer households.