THE HONEYBALL BUZZ

As I am about to head off for Labour Party Conference, I came across this excellent research produced by the TUC on the effect of the coalition government’s cuts in public spending. 

 Significantly, the research shows that the combined impact of all fiscal consolidation measures, both cuts to spending on public services and tax and benefit  changes, is deeply regressive – the poorest tenth of the population will lose 23.5% of their income while this is only 4.7% for the richest decile. In addition, the impact of spending cuts is, in fact, much more regressive than the impact of the tax changes.

 The choice of public expenditure cuts which hit the less well off the hardest as the main tool to reduce the deficit shows that this government has no compunction about hitting the most vulnerable people in Britain.

 The model used by the TUC is based on survey data about which households use particular

public services and how much they use them. The researchers have then combined this

information with government spending data to produce a picture of how spending is distributed across households, consumed ‘collectively’ or where the amounts of expenditure to different households, spending is allocated on a flat-rate basis used to model the distribution of all public spending in the UK.

 The TUC research shows that the impact of the cuts to average households is £1,308 per year. These cuts will also be regressive, with the poorest tenth of households losing income and services equivalent to 20.3% of their household income, compared to the richest tenth of households. These cuts is also proportionately greater for families with children and

pensioners, as well as households living in the North and Midlands.

Other research suggests that, unfortunately, people do not have an awareness of the value of public services they receive in return for the taxes they pay. This, in turn, jeopardises support for public spending. A sense of “public value” is the missing.

 One of the main tasks of the new Leader of the Labour Party should be to communicate this “public value” so that we all understand just how important the public sector and public services are to our lives.