The Financial Times reported research by the Institute of Fiscal Studies showing that over the term of the coalition government, middle earners did better than both the poorest and the wealthiest. The very rich lost through higher income tax rates and reduced pension allowances, while the poorest suffered through reductions in tax credits and benefits. The IFS says much the same can be expected over the next Parliament since none of the major parties’ proposals suggest any change. Over all households, the average cost of ‘austerity’ was £1,127 or 3.3% of average income.
The independent IFS has a good record when it comes to analysis. An interesting footnote is that the changes under the coalition have only eroded a small part of the gains that the poorest sectors of the population secured under the previous Labour governments.