Wednesday 25 August 2010

Clegg wants the IFS to get an octopus too

Nick Clegg continues his audacious attempt to rewrite the "old politics" rules of economic analysis. He has again attacked the Institute for Fiscal Studies over its analysis showing that the Coalition's choices in the budget were distributionally regressive, on the grounds that the IFS graphs do not include future budget decisions which the government has not yet taken.

Clegg said today:

"It doesn’t cover what we’re going to do in future budgets to build on the steps that we included in this budget to make the tax system fairer"

So we renew our challenge to Nick Clegg, George Osborne and Danny Alexander: can the Treasury set out how they believe their progressive "future intentions" should be included in the IFS' distributional modelling?

The IFS analysis shows that the decisions which have been taken so far by this government are regresssive. When the government makes further decisions, they will include them in their analysis - with the next major IFS briefing taking place the day after the comprehensive spending review.

But it sounds as though Nick Clegg thinks they should place less faith in Robert Chote's number-crunchers, and employ a clairvoyant octopus to do their budget modelling too.


Tom Freeman said...

OK, let's accept that he can use that defence, but only on condition that when he talks about Labour's "legacy", he includes the effects of the policies that Labour would have implemented had it won a fourth term.

And we'll need to be setting up an independent Office for Future Intentions so that we can have credible figures on what they're probably going to get round to doing.

(Also, when my boss has a go at me for not finishing a piece of work, I want to be able to say that the criticism doesn’t cover what I'm going to do in future to build on the steps that I've included so far to get some paltry amount of the job done.)

Guido Fawkes said...

Can you progressives guarantee that your redistibutive policies won't incentivise not working versus taking a low paid job?

That would be unfair.

Sunder Katwala said...


Good to see the right spotting that there are important equality and fairness issues to be resolved, but it is hardly a new point.

I think you may find that the Fabian Society has done more detailed thinking and work on the relationship and tensions between
equality and fairness, arguing for the importance of reciprocity.

I have not seen anybody else produce such detailed attitudes research on the dynamics of how different principles of need, desert and entitlement interact in current public attitudes.

The research suggests there are philosophical and political limits to a purely needs-based egalitarianism, and sparked an argument between John Denham and Roy Hattersley about these different arguments about inequality and fairness last year.