Getting the message across: The PCS union managed to project it's 'Say no to austerity' message onto the Palace of Westminster itself, home to the Houses of Parliament.

Getting the message across: The PCS union managed to project it’s ‘Say no to austerity’ message onto the Palace of Westminster itself, home to the Houses of Parliament.

Here’s the second in the loose series on the economy – this time from a November edition of The Guardian:

A landmark study of the coalition’s tax and welfare policies six months before the general election reveals how money has been transferred from the poorest to the better off, apparently refuting the chancellor of the exchequer’s claims that the country has been “all in it together”.

■ Sweeping changes to benefits and income tax have had the effect of switching income from the poorer half of households to most of the richer half, with the poorest 5% in the country in terms of income losing nearly 3% of what they would have earned if Britain’s tax and welfare system of May 2010 had been retained.

This means that, if you’re poor, the Conservatives have taken your money and given it to people who don’t need it.

■ With the exception of the top 5%, who lost 1% of their potential income, it is the better-off half of the country that has gained financially from the changes, with an increase of between 1.2% and 2% in their disposable income.

This means that the reasoning behind the Tory austerity programme is a lie. They said we were “all in this together”, but it is now clear that while some of us have been paying through the nose, it wasn’t to eliminate the deficit; it was to further enrich the already-rich.

■ The top 1% in terms of income have also been small net gainers from the changes brought in by David Cameron’s government since May 2010, which include a cut in the top rate of income tax.

So the Tory-led government has told the rich that they don’t need to help the deficit reduction effort (perhaps because it didn’t exist?). Obviously it would be counter-productive to have the rich paying money towards their own further enrichment, which was the real purpose of the last four and a half years.

■ Two-earner households, and those with elderly family members, were the most favourably treated, as a result of direct tax changes and state pensions respectively.

■ Lone-parent families did worst, losing much more through cuts in benefits and tax credits and higher council tax than they gained through higher income tax allowances. Families with children in general, and large families in particular, also did much worse than the average.

This is an experiment in social engineering. It says people need to stay in ‘nuclear’ family units if they want even a chance at getting on in life. What happened to the idea that the Tories are the Party of Choice?

■ A quarter of the lowest paid 10% have shouldered a particularly heavy burden, losing more than 5% of what would have been their income without the coalition’s reforms.

This speaks for itself.

For more details of the Conservative-led Coalition’s lies about austerity, deficit reduction, and “we’re all in it together”, visit the article on The Guardian‘s website.

Follow me on Twitter: @MidWalesMike

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