tag:blogger.com,1999:blog-7985429043801017839.post8796972989684374920..comments2023-10-27T07:50:27.411+01:00Comments on Next Left: Revealed: How CSR cuts will hit the poorest 15 times harder than the richTom Hampsonhttp://www.blogger.com/profile/05917325958130851128noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-7985429043801017839.post-68797258182372878592010-10-24T19:10:47.966+01:002010-10-24T19:10:47.966+01:00Sunder,
I'm agreeing with your point i), but a...Sunder,<br />I'm agreeing with your point i), but arguing that ii) is unproven.<br /><br />In particular how is the diproportionate benefit of public services to lower income groups which is indicated by your point i) reflected in either the impact to net income or net expenditure?<br /><br />The answer is that it isn't. <br /><br />And that is what Clegg is getting at - the issues you refer to can and do alter the issue of the progressive distribution of public service spending.<br /><br />The main example given is defence spending. This is unhelpful as this tends to be more evenly distributed across income groups.<br /><br />It is much more informative to look at education or health spending, which are in any case higher proportions of the total budget.<br /><br />The fact is that lower-income groups are much more likely to see the benefits of spending in these areas as they are proportionately less likely to send their children to private fee-paying schools like Harrow or Eton, or have private health insurance and be registered with Harley St doctors.<br /><br />And as the IFS discussion on the point which you give as reference states, even this is less clearcut: "the precise composition and manner of implementation of the package of impending spending cuts will crucially determine the extent to which they are progressive or regressive."<br /><br />Indeed, the devil is in the detail.<br /><br />So it's odd that the IFS has changed its tune in response to the CSR. And I think it's worth asking why.<br /><br />Is it perhaps to do with the appointment of the IFS' Robert Chote to head up the Office of Budget Responsibility which occurred in September?<br /><br />I've been looking for a comment from him on the CSR, but so far I've found none - can you help on this?Oranjepanhttps://www.blogger.com/profile/08150901449640162740noreply@blogger.comtag:blogger.com,1999:blog-7985429043801017839.post-77988679228172793682010-10-22T17:48:55.361+01:002010-10-22T17:48:55.361+01:00This comment has been removed by the author.Oranjepanhttps://www.blogger.com/profile/08150901449640162740noreply@blogger.comtag:blogger.com,1999:blog-7985429043801017839.post-29379173530996264392010-10-22T16:18:24.162+01:002010-10-22T16:18:24.162+01:00This comment has been removed by the author.Sunder Katwalahttps://www.blogger.com/profile/06671411534003530927noreply@blogger.comtag:blogger.com,1999:blog-7985429043801017839.post-40456950031582678322010-10-22T16:18:19.872+01:002010-10-22T16:18:19.872+01:00Oranjepan,
You may have to clarify what you are c...Oranjepan,<br /><br />You may have to clarify what you are challenging about the findings. It will certainly be possible to find people who say 'distributional analysis is not important and doesn't capture what is fair' (those are value judgements and political arguments) but I do not think you will find any neutral or independent academic voice who could disagree with either of these factual analytical points:<br /><br />(i) the overall pattern of overall public spending is progressive<br />(ii) the distributional pattern of the CSR spending cuts is regressive.<br /><br />There is no significant conflict between the Howard Reed data and the Treasury data [distributional annexe] for the 50% of public services spending data which the Treasury include. <br /><br />The Treasury published its first ever distribution of spending annexe in the CSR. We have been pushing them to do this. The IFS stated clearly in yesterday's presentation that the Treasury data shows a regressive pattern of spending changes. <br /><br />If you read the Reed/Horton September report, you will see it is very clear about the modelling assumptions necessary. There are a series of detailed methodological debates - these in large part revolve around how to distribute (if at all) the value of public goods (like defence). The IFS <a href="http://www.ifs.org.uk/publications/5299" rel="nofollow">discusses these here</a>, in response to the first Reed/Horton report. But none of these issues could alter the issue of the progressive distribution of public service spending, see this <a href="http://www.ifs.org.uk/publications/5234" rel="nofollow">July 2010 report</a>.<br /><br />***<br /><br />The inclusion of more data does change the scale of lost services (the Treasury estimates losses of £7-11 a week for households based on the 50% of spending sample) and it does somewhat change the scale of regressivity.<br /><br />The detailed Reed slides will be published today by the TUC. While the inclusion of areas of spending (on a flat-rate) for which there is no distributional household data shows a fuller picture of spending changes, it does not fundamentally alter the underlying distributional pattern, and I can't see any reason why this is in doubt.<br /><br />You can also find Howard Reed's credentials as an economic modeller at the <a href="http://www.landman-economics.co.uk/modelling.html" rel="nofollow">Landman Economics</a> website. His research was covered in the CSR analysis of yesterday's FT and used to generate one of the graphics. The Economics Editor of the FT wrote that the most plausible defence of regressive spending changes is that all spending changes on this scale are bound to be regressive, given the progressive pattern of public spending. The government could choose to argue that - as some government supporters also advocate - but that is not the argument that Osborne or Clegg have used this week, which has been the factual claim that the spending changes are distributionally progressive.<br /><br />There does not seem to be any evidence to support this, as is clear from the Treasury annexe.Sunder Katwalahttps://www.blogger.com/profile/06671411534003530927noreply@blogger.comtag:blogger.com,1999:blog-7985429043801017839.post-43871034611140490852010-10-22T12:41:18.056+01:002010-10-22T12:41:18.056+01:00I find it interesting that your sources appear all...I find it interesting that your sources appear alligned politically, and this seems designed to make it hard to avoid the conclusion which you're so fiercely driving at.<br /><br />As a methodology it is clearly unsound, irrespective of any facts presented, so it casts doubt on your analysis and any conclusions to be drawn.<br /><br />You can get away with it when in government because the state is officially non-partisan, but not when in opposition.<br /><br />So if you could provide some corroboration for these views which have been arrived at independently, rather than simplistic tit-for-tat ideological ripostes I'd be more likely to be convinced by your sums.<br /><br />That is if you're more interested in political debate than a bun fight, of course.<br /><br />Thanks.Oranjepanhttps://www.blogger.com/profile/08150901449640162740noreply@blogger.com