Downing Street Says » IFS Analysis

Asked what the Government’s response was to the IFS comments on the Spending Review being regressive, the Prime Minister’s Spokesman (PMS) told the assembled press that the Government had tried very hard to make the Spending Review and the Budget as progressive as possible.

The PMS said that he noted the IFS analysis was based on ignoring the people at the top and the fact that they were paying the most. The PMS added that the IFS had included housing benefit in their model, whereas the Government had included programme spending, so there was a difference in the analysis.

Put that the IFS had also said that working families with children would be losers in terms of tax and benefit changes, the PMS replied that as he had said, the Government had worked very hard to make decisions in a way that was as progressive as possible. Dealing with the deficit was something that was unavoidable and had to be done.

Put that the Prime Minister had pledged to help pensioners and families, but had only upheld one of those pledges, the PMS said that we were doing things to support families, particularly families on lower incomes. For example there was an increase in the child element of the child tax credit and we were doing more to invest in the schooling of people from lower income backgrounds.

Put that he had mentioned assumptions in the IFS analysis and did that mean the analysis was flawed, the PMS replied that as the Treasury had said yesterday, this analysis was difficult to carry out and the Government had made assumptions in its analysis too.

Asked if such analysis was worth doing, the PMS said that the Government was trying to be as open and transparent as possible.

Asked if it was fair to say that the Government assumed’ the Spending Review was progressive, the PMS said that was not the case. The PMS said there were a range of things being modelled. For some of them it was easier to know where the impact fell, such as a change to income tax, whereas with public services for example, it was a lot more difficult to say which income groups used which services.

Asked why the Government didn’t just call the Spending Review fair’ rather than the Prime Minister and the Government trying to prove it was progressive’ and ending up in a fist-fight’ with the IFS, the PMS said that we were trying to make sure people from different income groups made their fair contribution.

Asked about funding for schools and whether reports suggesting 60% of pupils would attend a school where funding would fall, the PMS replied that the Chancellor had said in his statement that funding for pupils would remain constant in cash terms. The PMS added that when you looked at what the Government was doing as a whole, we were protecting school funding.

Asked whether the Coalition Agreement had said funding for the Pupil Premium would be additional, the PMS replied that it did. As the Chancellor had said, we would ensure the cash funding for pupils would not fall and also introduce a new 2.5bn Pupil Premium that supported the education of pupils from disadvantaged backgrounds.

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» Thursday, October 21, 2010

IFS Analysis

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