Poor 'Hit Hardest' By Emergency Budget

The coalition government's emergency Budget has hit the poorest families the hardest, a leading economic think-tank has revealed.

The Institute of Fiscal Studies (IFS) said that low income households with children would lose more as a percentage of net income, due to benefit cuts.

The report said: "Once all of the benefit cuts are considered, the tax and benefit changes announced in the emergency Budget are considered, the tax and benefit changes announced in the emergency Budget are clearly regressive as, on average, they hit the poorest households more than those in the upper-middle of the income distribution in cash, let alone percentage, terms."

This meant that only the richest 10 per cent of households lost more in cash terms than the poorest 60 per cent.

The report said: "Low-income households of working age lose the most from the June 2010 Budget reforms because of the cuts to welfare spending.

"Those who lost the least are households of working age without children in the upper half of the income distribution.

"They do not lose cut from cuts in welfare spending, and they are the biggest beneficiaries from the increase in the income tax personal allowance."

Shadow Work and Pensions Secretary Yvette Cooper accused the coalition Government of carrying out a "shocking and unfair attack on children and families".

However, a Treasury spokesperson said that the government did not accept the IFS' report. They said: "It is selective, ignoring the pro-growth and employment effects of Budget measures such as helping households move from benefits into work, and reductions in Corporation Tax."


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