by Stewart Lansley
The government has consistently argued that under the government spending review those with the broadest backs would take the heaviest burden – that the package would conform to the principle of 'progressive austerity'. However, two independent studies, the first by the Institute for Fiscal Studies and the second by Tim Horton and Howard Reed for the TUC, challenge this assessment, finding that the overall impact of the spending review is regressive.
The government's plans, as announced in the 2010 spending review, involve a number of tax rises – especially the rise in VAT to 20 per cent from January 2011 – and an £81 billion package of spending cuts. These are needed, the Coalition argues, to close the fiscal deficit inherited from Labour.