Budget: Coalition fails its first test – and, pul-lease, spare us the codswallop about 'hard choices'

This post supersedes all previous posts and tweets on this subject, which I hereby retract.

The Institute of Fiscal Studies verdict is very clear. The Budget will “hit the poorest the hardest“. Nick Clegg cannot wriggle out of this one. Just look at this graph here – it is mind-blowingly unequivocal.

The two counter-arguments to this, which Nick Clegg put up this morning, are:

1. If you take into account measures already announced by Labour with the latest budget, then the overall impact is that it hits the poorest the least.

In other words, Labour weren’t that bad after all. Their announced measures were progressive. The budget does hit the poorest the most and is regressive. But if you take Labour’s progressiveness and the coalition’s regressiveness, it adds up to progressiveness. Codswallop. The budget hits the poorest the most – there is no getting away from that. The design was wrong and Clegg seems to have been duped (the dupes in the government seem to be on the front bench – not the back bench as in the case of the opposition, as Cameron referred to them yesterday) by the treasury tables. And it doesn’t take a genius to work out where the flaw is. VAT. If only the government had had the courage to implement an increase in income tax targeted at middle and high earners, we would now be looking at a progressive budget which hits the poor least – the litmus test for the coalition government, as far as I am concerned and one which the government has failed. And please, can we have no more claptrap from Clegg etc about “hard choices have to be made”? It’s quite simple. Your self-given task was to design a progressive budget which hits the poorest the least. Instead you produced a regressive budget which hits the poorest the most. You have failed and it has nothing whatsoever to do with ‘hard choices having to be made’ – you made the wrong choices – pure and simple.

2. If you take into account measures the government has not already announced, the budget is progressive, hitting the poorest the least.

I can’t believe Nick Clegg had the audacity to say this on Today this morning. This is entering the realms of fairy land. Total cloud cuckoo stuff. Ridiculous. In any case, it implies/assumes/confirms that the poorest are hit the hardest first but then might get a bit of relief in a few years time. At best it’s an admission by Clegg that he has failed to protect the poorest. At worst, it makes a complete farce of the government’s position.