Tag Archives: Comprehensive Spending Review

The Grim Reality of Osborne’s Sense of “Fairness”

I will post in more detail on the CSR in due course, when I’ve waded through the political double-speak and read between the lines, but for now, let’s look at the “fairness” assessment provided by the Treasury itself. There is a graph in the back of the CSR document which shows where the burden of the report’s measures fall hardest. Osborne, Alexander and co have been claiming the CSR is fair. Nick Clegg suggested it had “Liberal Democrat principles running through it like a stick of rock”.

Looking at the figures in Chart 5b on p.99 of the full CSR report, the analysis is this:

The bottom 10% of earners will suffer a hit of 1.6% of their net income, whereas the top 10% will lose out by 2.2%.

Ah! Fairness, you see! The rich proportionately lose more.

But consider this. The second hardest hit group is that poorest 10%. These are the group who rely on Housing Benefit (cut), disability benefits (cut) and the other £18bn which is being removed from the welfare budget. To illustrate, let me paint you a (simplified) picture.

A man needs to find some money to pay a debt, so he approaches two people. One man is very rich, a millionaire. “Can I have £100,000 please?”, asks the debtor. “Why?” says the rich man. “Because I need money and we are all in this together.” The rich man reluctantly agrees, after all he still has £900,000 and some money tucked away in the Cayman Islands, which the debtor doesn’t really care about.

The debtor then approaches a poor man. One of the poorest in the country with only £10,000 to his name. “Can I have £900 please?” “Why?”, says the poor man. “Because we are all in this together and besides, the rich man gave me £100,000, which is 10% of his money. I am only asking you for 9%.”

The poor man hesitates. ” But I really need all my money. For food, for clothes for my kids, for my house. When you take all that away, I don’t have £900 to spare.”

“Sadly”, says the debtor with a smile, “because we’re all in this together, you don’t have any choice” and he grabs the £900 and heads off to meet the millionaire for a drink. Well, they used to go to school together, you see.

I don’t think we should put up with living in a country where this becomes the definition of “fairness”.


Filed under Coalition, Economy