Opinion: the IFS, the buts and the maybes – questions of fairness and the CSR

Last week Nick Clegg and the Institute of Fiscal studies squared up over the issue of whether the cuts proposed in the Comprehensive Spending Review are fair.

It is a debate which strikes at the heart of Lib Dems in the coalition government and it will determine the shape of politics in this country for next decade.

For the first time ever the Treasury included an impact analysis of the announced changes within the CSR, the effect of pressure from Lib Dems. These were calculated according to the sections of society that will bear the burden of the changes (ie how ‘progressive’ it is).

But it is a question subsequent events show it has singularly failed to settle.

It came after years of urging from left-wing think-tanks (such as the Fabian Society) that the Office of National Statistics annual evaluation of the effects of taxes and benefits on household income [pdf report June2010] was insufficient.

The controversy begs two questions:
1) why didn’t Labour force the Treasury to include an impact assessment in 13 years of government under Brown or Blair?
2) if the established measures didn’t enjoy support, why wasn’t a review of the impact analysis methodology introduced earlier?

After the election the IFS attempted to do just that with a report timed to coincide with the coalition’s post-election emergency budget. The IFS argued that “assessing the impact of government activity on the distribution of household living standards is essential to the evaluation of public service provision,” but offered the warning that this “raises challenging conceptual issues” and cited sources claiming that the then current methodology provided by the ONS was too simplistic [pdf report July2010].

The IFS were then charged with developing new criteria to determine a more accurate impact analysis. Their new calculations informed the basis of Chancellor George Osbourne’s speeches to the House of Commons on the spending cuts which the Government could recommend on the basis that the cuts were indeed ‘progressive’.

Following the Chancellor’s speeches on the Budget and CSR, the IFS gave their widely reported counter-briefings arguing a diametrically opposed conclusion [pdf press release August2010, pdf opening remarks October2010].

This is the graph presented by the Treasury during the CSR:

This is the corresponding graph presented by the IFS:

Can you spot the difference?

The former shows a representation of the impact measured as a percentage of net income by decile. The latter includes a representation measured as a percentage of net expenditure, using projections from two years later to exaggerate the effect. The former explains that the cuts are generally progressive, but the latter that the cuts are massively regressive.

So when Nick Clegg intervened to denounce the IFS briefing as ‘distorted nonsense’, besides the attack the more astute reader would notice that this supported the July review of the need for more accurate assessment of fairness, as written by none other than the IFS.

Clegg stated that he “fundamentally disagreed” with this month’s IFS analysis of the biggest losers in the welfare spending cuts, arguing for a more accurate analysis including welfare spending inputs from services such as childcare and social care which are targetted and taken up by more the most vulnerable lower-income groups and families with children, but who the IFS said would be hit hardest in cash-only terms by the changes to tax and benefits.

As it was the IFS had effectively rewitten the sums devised by the ONS without challenging the ‘conceptual issues’ they had identified – and the standard bearers of the left (Labour, Trade Unions, Fabian Society et al) have swallowed their conclusions whole!

So why the turnaround by the IFS on the issue of fairness?

At last December’s pre-budget report the IFS recommended 13% cuts to departmental budgets to deal with the budget deficit problems, a view which was subsequently taken up as Labour policy on the grounds that deeper cuts risked a double-dip recession. This which was followed by 25% cuts proposed in the budget and angrily rejected by the IFS.

Advocates of a smaller-state might argue that a respected, impartial and independent think-tank actively tendering for projects formerly undertaken by a government quango is a good example of encouragement the private sector needs to make the desired productivity gains and fill the gap left by government cuts.

A sceptic, however, might point out that the IFS report was funded by the Economic and Social Research Council, which is staffed by appointments made under the previous government, is itself dealing with cuts and agreed to ‘strongly communicate’ the implications of any changes to its financial allocation which it recieves from the Department of Business, Innovation and Skills. Consequently ESRC board members decided it would “quickly respond to questions raised by rapid changes of events” and this may have mitigated against deeper investigation into measures of fairness, possibly causing the IFS to rely too heavily on the previous sums devised by the ONS and which critics had deemed ‘insufficient’.

The coalition has now revised the cuts to departmental budgets down by a quarter to 19%. It has done this by making additional savings elsewhere, such as by postponing capital spending, and it has done it in order to reach its stated aim of reaching budget stability by bringing nominal growth in budget growth back into line with longer trends in 4-5 years. Yet the vehemence of the IFS opposition is undiminished and appears to be growing as they get drawn into the political arena.

It should be no surprise that this timescale coincides precisely with the period Nick Clegg and David Cameron have promised to remain in coalition before going to the country for the next general election.

Were the total cuts to be smaller this would take longer and therefore require a new mandate to complete the programme, but for the governing coalition to survive until a point after the next election it would demand some form of electoral pact between LibDems and tories – something activists in both parties see as poison – and especially with the prospect of a positive referendum on proportional votes looming, which should be a given as Ed Miliband has stated his support for AV on the grounds of fairness (what else!) and must back to the hilt the item in the coalition agreement LibDems have described as a ‘deal-breaker’ and a ‘game-changer’.

So Labour strategy to attack LibDems over fairness in cuts is three-fold.

The easy solution for them is to undermine LibDems sufficiently to break the coalition and force an early election before government by coalition is effectively locked in by an AV referendum.

Labour’s second option is to weaken resolution within the coalition in order to delay the point at which it can be dissolved amicably in preparation for an AV election where an electoral pact would paint LibDems as ‘tories in disguise’.

And thirdly it deflects from Labour’s own cuts agenda which it needs to maintain any economic credibility.

Maybe this explains why Labour must stoke an argument over fairness to stand any chance of returning to power within the foreseeable future.

But if anyone is in any doubt about Labour’s commitment to fairness, we only need to consider their track record and how growth in economic inequality under Labour carried over from the 1980s and 90s throughout their 13 years in office, according to the Equalities Office [pdf report Jan2010] (this is particularly important here as continuing growth in inequality suggests any calculation of the impact of tax and welfare changes on income or expenditure by decile becomes less relevant over time as the effect of spending on services increases in relevance).

Maybe we should ask, “where were you in the Labour government, Mr Miliband?”

And therefore maybe we should also question the emphasis given to the opinion of the ‘respected’ IFS regarding the progressiveness of cuts when it is only the most well-known of a range of equally respected bodies producing reports into fairness.

A balanced and pluralist perspective undoubtedly gives a fuller picture than a single independent view, however impartial the people giving it – and surely you can’t say fairer than that!

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55 Comments

  • Whatever graphs and arguments made the fact is that it is not fair that many people are going to suffer and be thrown into poverty. No rich person is going to have the choice of food or heat. The vulnerable are living in fear, are the rich? I am no supporter of Labour and cuts under them would have been just as nasty. Please stop trying to excuse the cuts in this way, it does not make them fair just because Labour would have cut as well. this sounds like a playground argument. i wish that I could see any compassion from Lib Dems or any concern on the HUMAN cost. I voted Lib Dem as many did so that they could curb the excesses of both Tory and Labour and this is why we feel so betrayed.

  • This is an excellent analysis showing that – perhaps – that the CSR was not wholly unfair.

    Anne, sorry you reject graphs and arguments. I think this is a little unfair, as these are the facts on which decisions have to be made. The graphs and arguments are about real people, who will not lose out nearly as much as Labour or the Tories would have allowed. The point about these graphs and arguments is that they do exactly what you voted for: The LDs are curbing the excesses of both Tory and Labour. [obv there’s plenty I am not happy with – housing benefit, and diability benefit reforms – but the article is about income and expenditure, benefits are different issues.]

  • Anthony Aloysius St 27th Oct '10 - 12:03pm

    I don’t understand the suggestion in the article at all. The suggestion seems to be that the IFS has chosen to display the data in a particular way – a different way from the Treasury – in order to give the impression that these measures are regressive.

    In fact, it’s the author of the article above who has for some reason picked out a graph from the IFS presentation which is presented in a different way from the Treasury one – by organising households in terms of expenditure rather than income – and which relates to a different timescale. The IFS presentation from which that IFS graph came contains graphs organised in both ways, and graphs relating to both timescales:
    http://www.ifs.org.uk/budgets/sr2010/distribution.ppt

    The real differences between the Treasury analysis and the IFS analysis are that (1) the IFS has attempted to estimate the effects of a number of measures that weren’t considered by the Treasury – changes to Housing Benefit, Council Tax Benefit, Employment and Support Allowance and Disability Living Allowance, all of which will tend to affect lower income households and (2) the Treasury didn’t consider the longer timescale, which is when the effects on poorer households will be most severe.

  • @ Milleau
    Go out in the disabled forums. graphs are not helping them. Benefits are a major part of the cuts used to pay for instance, the pupil premium. Tell me how poor people are not losing out more? Are you lying awake night after night, are you contemplating how the hell you are going to live? Arguments about fairness between Labour and the Coalition is futile when people are suffering now.

  • So, there’s an arguement betweeen Clegg & the IFS about the unfairness of the CSR.

    And so, yet again, you write an article indicating that this is all Labour’s fault?

    When will a Lib Dem actually take responsibility for their actions?

  • “The easy solution for (Labour) is to … force an early election before government by coalition is effectively locked in by an AV referendum.”

    A dangerous remark. Does the pro-AV campaign really intend to argue that the purpose of AV is to keep the ThirdReichsKoalition in power for a thousand years? Hope not!

  • A sceptic, however, might point out that the IFS report was funded by the Economic and Social Research Council, which is staffed by appointments made under the previous government, is itself dealing with cuts and agreed to ‘strongly communicate’ the implications of any changes to its financial allocation which it recieves from the Department of Business, Innovation and Skills. Consequently ESRC board members decided it would “quickly respond to questions raised by rapid changes of events” and this may have mitigated against deeper investigation into measures of fairness, possibly causing the IFS to rely too heavily on the previous sums devised by the ONS and which critics had deemed ‘insufficient’.

    Regardless of the wider content of the argument above, this paragraph is rather odious in its implication. There is the suggestion that the ESRC is not only stacked with political appointees, but that it would compromise the independence of researchers to protect its self-interest. No evidence is provided to even hint that there may be reason to suspect this. This is like people who don’t believe in global warming insisting that the scientists are falsely presenting their data to satisfy politicians trying to curb emissions. Frankly it’s nasty, anti-intellectual and such behaviour is usually the last resort of those who have no evidence to make their case.

  • I find this post rather shocking. Perhaps I’m misunderstanding.

    On a point of detail: those two graphs. The first graph, if I understand correctly, is the Treasury’s own analysis, whilst the second is the IFS’. I assume you are not therefore accusing the IFS of inconsistency as such, as those are two different sources.
    Secondly, where have you got that IFS graph from? Because it does not seem to be in any of the documents you have linked to. “This is the corresponding graph presented by the IFS”…when? Figure 1 in their 25 August press release looks *similar*, but as you can see if you follow the link you provide http://www.ifs.org.uk/pr/progressive_budget.pdf, it is clearly not the same graph.
    Thirdly, yes the graph does include changes as a percentage of expenditure, and it *also* includes changes as a percentage of income. Which makes your description a little misleading. And in any case, what’s wrong with providing more information? It allows people to check both measures. This document from the IFS in June http://www.ifs.org.uk/budgets/budgetjune2010/browne.pdf explains why looking at expenditure might be useful.
    Finally, the first graph divides the population by income decile, but the IFS graph does it by expenditure decile. (The “Figure 1” I refer to above uses income decile.) Is it therefore unsurprising that they do not look the same.

    I’m sorry, but your failure to put this all into context does give the impression of spin, rather than “analysis”. It also undermines the credibility of your article, as this seems to be your launching point for the wider attack against the IFS.

    So on to your substantive point. All of a sudden, the IFS has become party political. I thought it was the IFS that used to check the costings on the Lib Dem manifesto? Were they respected then? Please, go to the IFS publications on budget analysis http://www.ifs.org.uk/publications/browse?subject=2 from when Labour was in government and see what they said then. They were not government cheerleaders. It is widely recognised that they are an honest voice who will critique all governments, and I’m sorry, now that the Lib Dems are in government that includes us. The IFS is a “think tank” that publishes in peer-reviewed journals. Honestly, this is absurd. The ESRC is publicly funded, so it must be politicised? What next, we can’t trust academic research either? And on that point, go have a look at the research fellows from academic institutions at the IFS http://www.ifs.org.uk/people, people from Oxford, Cambridge, UCL, the Nobel-prizing James Mirrlees.

    I’m sorry if I’ve got the wrong end of the stick. But this latest episode makes me really disappointed in the Lib Dems.

  • It’s interesting to watch the technical specialists arguing over these arcane points, but there’s a simpler way to look at things.

    Referees are sometimes blind, but rarely biased. Football managers are often sharp observers, but they’re usually biased as hell. A manager who claims that the ref has been deliberately unfair to his team only makes himself look silly.

  • Anthony Aloysius St, thanks for that information! I’m glad the majority of commenters here so far can see what is wrong with this kind of argument (and have made the point more succinctly than me). I’ve been a strong to wavering supporter of the Lib Dems over the last 11 years, who finally left in the summer out of confusion at the apparent about-face on the need to make rapid cuts (and the possible regressive nature of those cuts doesn’t help). But I still have doubts about whether I’m judging the party too harshly. Things like Nick Clegg’s recent comments, and this article, aren’t really drawing me back.

  • Ruth Bright 27th Oct '10 - 1:04pm

    Clegg complains that the IFS has not factored in the new promise on childcare – but that promise, though welcome, assists only a minute section of the population ie people on a low income with a two year-old child.

    As for the coalition needing a ‘new’ mandate if the cuts took longer; there isn’t even an old mandate. Both Tories and Lib Dems went into the election opposing the Health in Maternity Grant but there is no mandate at all for most of the other welfare changes.

  • Anthony Aloysius St 27th Oct '10 - 1:06pm

    “But when the poor are so much more reliant on the state than the rich, however much we don’t want it to happen, these cuts will hurt them.”

    This really is nonsense. It’s entirely the government’s decision how fast the deficit is reduced, what the balance is between increasing taxes and cutting spending, and which taxes are increased and which spending is cut.

    The poor are being hurt because of the way the government has chosen to do things, and its apologists really have to accept responsibility for that.

  • Innuendo, smear, misrepresentation. God, is this really what we’ve come to?

  • Anthony Aloysius St 27th Oct '10 - 1:34pm

    “Honestly, this is absurd. The ESRC is publicly funded, so it must be politicised?”

    It only demonstrates how little the author of the article understands about it. To say it smacks of desperation would be an understatement.

  • “The coalition has now revised the cuts to departmental budgets down by a third to 19%. It has done this by making additional savings elsewhere, such as by postponing capital spending, and it has done it in order to reach its stated aim of reaching budget stability by bringing nominal growth in budget growth back into line with longer trends in 4-5 year”

    Why do Liberal Democrats find it so difficult to write coherently, which paints the True Picture?

    Why Give examples of making additional savings: using “postponing capital spending”
    Instead of using something that would paint a fairer picture
    “Further cuts to welfare”

    Do Liberal Democrats find it so difficult to talk about the £18 BILLION Cuts that have been made to welfare?

  • Anthony Aloysius St 27th Oct '10 - 1:37pm

    Milleau

    “obv there’s plenty I am not happy with – housing benefit, and diability benefit reforms – but the article is about income and expenditure, benefits are different issues.”

    As I mentioned above, these benefit reforms were taken into account by the IFS, though not by the Treasury.

  • off topic I know.

    But I want to express my disappointment that a thread in which Liberal Democrats can throw some weight behind, in arguing over interpretations of the IFS. Becomes extremely Active with Lib Dem Supporters.

    And yet a thread

    https://www.libdemvoice.org/liblink-simon-hughes-is-no-rebel-21784.html#comment-148866

    Which discusses housing benefit and the risks of throwing people out of their home, is avoided like the plague by Lib Dems

    It doesn’t make good politics if you pick and chose your arguments.

  • Anthony Aloysius St 27th Oct '10 - 1:50pm

    “As you say, if you want to measure how progressive a policy is, if you use income deciles, you’ll be including wealthy people living off savings as being amongst the poor. Excluding such people by using expenditure deciles makes sense.”

    Surely the simple fact is that there are many households whose income is not equal to their expenditure.

    Whichever classification you use there are going to be anomalies. If you classify by income you’ll include people living off savings in your lowest decile; if you classify by expenditure you’ll include people who because of their circumstances spend only a small proportion of their income. There will be similar anomalies in the top decile, of course.

    But if you look at the graphs, you’ll see that the disparity between average income and average expenditure in the bottom decile is smaller when you use an income classification than when you use an expenditure classification. That alone would argue that an income classification is preferable. But the fact that there are such large errors in the estimates of expenditure means that classifying by expenditure makes very little sense.

  • Ian Sanderson (Hull) 27th Oct '10 - 2:34pm

    The whole problem is that ‘fairness’ and ‘fair’ mean different things to different people. It is a nonsense that the whole political world is arguing for what is ‘fair’, because it can only lead to disappointment from every part of the electorate, as every economic decision has an element of being unfair! Labour is winning the argument on ‘fairness’ by putting forward the idea that it is fair that the rich pay and the poor don’t. The electorate do not necessarily see this argument, but instead look at how fair a policy is by how it affects their family.

    Furthermore, the country seems fully taken with the ‘bankers shouldn’t be paid millions in bonuses’ argument. In this context, everything the government does seems disproportionate. Is it fair that child tax credits are to be raised by ONLY £50, when the bankers get paid millions? Is it fair that housing benefits should be cut whilst there are bankers living in mansions?

    The childless (especially those on low incomes), the ‘squeezed middle’, the people who work 50-60hrs+ a week to give the best for their families, the savers, the entrepreneurs etc etc, all have a different idea of ‘fairness’ to the one being espoused by the IFS, Labour party and elements of the coalition (both Liberal and Tory). Fairness isn’t being taxed until the pips squeek, or seeing your next door neighbour be lavished with tax payers money for choosing to have children they couldn’t afford to raise, or seeing your hard work and investments come to nothing as the increasing tax burden kills your business.

    If the coalition is going to win the ‘fairness’ argument they need to come up with a clearer definition and one that a majority of the population can back.

    I see the cap on housing benefit as being the clearlist sign yet that the coaltion is understanding that ‘fairness’ isn’t about giving everything to the vunerable. It isn’t right that large sections of working people and families cannot afford to rent privately in the most desirable places in the country, yet others can claim massive amounts in housing benefits to live in these areas. There will always be some that due to changes in circumstances can no longer afford to live in these areas without housing benefits. Unfortunately, there will always be losers and an ‘unfairness’ to some. However, certain LibDem poltiicians need to realise that ‘fairness’ needs to ‘fair’ to all, not just the losers, but the hard working tax paying families too.

  • Anthony Aloysius St 27th Oct '10 - 2:48pm

    “However, certain LibDem poltiicians need to realise that ‘fairness’ needs to ‘fair’ to all, not just the losers, but the hard working tax paying families too.”

    Well, according to the IFS analysis, the people who are actually being shielded to the largest extent in this process are those on middle incomes and above (though not the highest-earning 10%, IF the effects of Darling’s last budget are included). Is that what you meant by “hard working tax paying families”?

  • @ Oranjepan
    “If you wish to blame someone then you may like to consider who brought the country to this situation in the first place.”

    Do you mean the bankers?
    It certainly was not the group you have attacked the most, the vulnerable.

  • @Oranjepan

    perhaps you’d care to look at the report of the ESRC board meeting which indicates just that (linked above).

    from the minutes

    Council agreed the vital need for advocacy not only for social science but for science
    across the research base in general. It was important to identify what the consequences
    would be for any reduction in research funding and that this should be strongly
    communicated. The uncertainty over when the Council would receive its financial
    allocation for 2011-12 onwards was discussed.

    I’m not sure how you go from this statement that the ESRC intended to lobby for research funding, which is the only reason it exists, to the implication that it is staffed with political placements intent on undermining the independence of researchers. Are you really suggesting that because the ESRC were concerned about a possible reduction in their funding that they would tell an independent body, the IFS, to misrepresent their figures on the impact of cuts? The cuts, incidentally, come from a wholly different budget and are overseen by a wholly different minister than BIS, who fund the ESRC.

    It would be a conspiracy of extraordinary cunning if the research councils were staffed by Labour spies intent on using a network of researchers, each in loyal subservience to their Labour masters, to fiddle the figures to undermine a department that they do not depend on for funding. Presumably you think this is the case?

    That would be an interesting assumption to make when challenging data you disagree with.

  • @Oranjepan

    “As I understand it the housing benefit cap is for new tenancy agreements and is capped at £21,000 per year”

    At no point have they said that Housing Benefit Caps will only apply to New tenancies, In fact Ministers have confirmed that some current residents in their constituencies would be forced to move out of inner London, or out of London altogether.

    “Might I ask you what kind of property you envisage £21k subsidised rent pays for”

    I think it would be fairer to use the maximum payable for an average 3 bedroom property, which they have said will be capped at £340.00 a week or £17’680 a year

    Now I dont know of many properties in London where you can rent a 3 bedroom property @£340 a week or less.

    Now you imagine, one of the public sector workers who is married with 2 children, currently paying rent of £400 a week Rent in London, who is about to lose his job and maybe forced to claim JSA and Housing Benefit, and the Housing Benefit will not cover his Entire costs, Then you factor in that, he takes more than 12 months to find another job and so his HB is reduced by a further 10%. allowing him only £306.00 a week in Benefit, forcing him to pay the shortfall of £94.00 a week

    A couple with 2 children would be entitled to
    £102.75 JSA
    £54.67 Tac credits
    £20.30 CB
    Total £177.72 a week in benefit

    And out of that £177.72 a week they would need to contribute £94.00 towards rent.

    Leaving £83.72 a week for a family of four, too feed,clothe, travel and pay for utilities.

    (or the alternative, to uproot his family and move out of London)

  • @Oranjepan

    you’re suggesting I see a conspiracy, when really I’m arguing there is a complex relationship which needs to be better understood.

    Greater transparency would help with that, so if you have something to share I’m sure it’d be welcome.

    Can you explain this complex relationship a bit better, because I’m struggling to see on what evidence your accusation is based? Also, could you expand on your desire for transparency, ESRC minutes and funding decisions are made public and IFS methodology and data sources are made clear? Short of hacking into their emails I’m not sure what else you could do to increase transparency?

  • Barry George 27th Oct '10 - 4:22pm

    Matt

    Further to your point…

    If the family in question has no savings then they have to try and move with their £83.72 a week.

    They would need a months rent.
    Five weeks deposit
    Moving fees
    and contract fees.

    Or in other words ‘impossible’.

    Clearly the family would find themselves homeless if they were forced to move.

  • Anthony Aloysius St 27th Oct '10 - 5:10pm

    Oranjepan

    Perhaps you will at least acknowledge that the graph you selected from the IFS report did not correspond to the Treasury graph you showed. (In fact the IFS presentation did contain a report which did correspond to this Treasury graph, which you could have chosen if you wanted to make a fair and meaningful comparison.)

    And I would agree with ‘G’ that having made a statement that appeared to cast a slur on the political impartiality of the ESRC, in fairness to them you should clarify what you did mean, if that wasn’t your intention.

  • @oranjepan
    “Nobody is completely above reproach. Not me or you or anyone else”

    You are still trying to excuse the attacks on the poor! the ‘undeserving rich’ (some of whom you mention) are laughing in their champagne. Whoever’s ‘fault’ why make the most vulnerable suffer? The Lib Dems (with Nick Clegg et al cheering and patting backs) rushed into it so quickly they obviously did not want an alternative.

  • Here we go:

    @ Oranjepan: Thank you for replying. I don’t want to get too caught up in criticising you or your piece, because I think there’s a wider question of how we treat sources of “objective” analysis in politics. I’ve re-read my comment and OK my “party political” objection was not quite right. I apologise for that. However, you certainly seem to suggest, at many points, that the IFS has acted unprofessionally and with an agenda, and at one point you do suggest partisanship. (Incidentally, basing your views on one source of analysis may be unwise but how is it *partisan*? The IFS is not a political party, it’s a group of economists.) Just read again the passages including languages like this: “counterbriefings”, “diametrically opposed”, “effectively rewritten the sums”, “vehemence of the IFS opposition”, “get drawn into the political arena”…and the sarcastic use of “respected”. Then there’s the strange use of those graphs, as others like Anthony Aloysius St have pointed out, and finally your attempted answer to the question “Why the turnaround on fairness?”, which certainly does seem to rely on some ESRC-driven self-interested agenda. These are serious accusations of a (genuinely) respected and valuable institution in the world of policy analysis. Quite frankly, I might expect this kind of stuff from ardent Thatcherites or the control freakier members of New Labour, but not the Lib Dems. That’s disappointing.

  • @ George Kendall: you have a point, and I’m all for a discussion of how we define fairness, try to measure it, etc, and that includes discussing IFS methodology, and indeed the methods used by economists generally, which I think have limitations. I think the IFS recognises this is an open question. But I’d make two points.
    (1) Having chosen a particular measure of fairness (or several), an organisation like the IFS then does try to quantify that measure *objectively*. That kind of work needs to be checked (through peer review, etc) but I think it’s a bit dangerous for politicians to try to undermine the credentials of that research. (They can absolutely go ahead and try to influence the earlier questions, and I have no problem with what Nick Clegg has said on that point. Of course we can’t stop them from disputing the results either, but way Nick Clegg has done that has certainly decreased my respect for him.)
    (2) There’s a spectrum here of types of “discussing”. This piece seems to be at the other extreme, and very much seems to undermine the authority we might accord IFS analysis (to someone unfamiliar with how these studies are done, or what the IFS is, that would be its effect I’m afraid, regardless of Oranjepan’s intention). There is certainly an analogy with the attacks on climate change scientists as G pointed out at 12:27. I don’t think this is acceptable.
    I don’t think what you’re saying is extreme, but it still seems to me wrong. Something like choosing measures of fairness does implicitly involve value judgements (which could be described as “subjective” I guess, but note we wouldn’t respect analysis where the values were ones no one else in society shares). But to say the whole study is “inherently subjective” is far too dismissive…there is a component which is genuinely objective, and the analysis is conducted according the professional norms developed over decades by academic economists.
    I would also object to your equating the Treasury and the IFS. I am not arguing the civil service is politicised (that would be to make a parallel mistake), but it is subject to political pressure that the IFS is not. That is the point of having the IFS, and why we should take its analysis seriously. Similarly, I’m not sure how useful it is to group the IFS with other Westminster “think tanks”. Organisations like IPPR, Demos, CentreForum etc, do interesting and valuable work I’m sure, but they wouldn’t be the obvious port of call for hard objective analysis on the budget. A more obvious choice of alternative sources would be (other) academics, or other research institutes.

    Sorry for the rather lengthy comment. But I think the question of how we treat non-political authority (e.g. academic) in politics is tricky, and important to get right.

  • aargh sorry I’m making a mess of this. If you could remove my huge 8:20 comment but let through the 8:25 reply to George Kendall, that would be great, thanks!

  • “to the people who didn’t care enough to go out to vote one way or the other.”

    If you want people to vote, why not give them something to vote for?

    As far as I am aware, none of the three main parties had policies in 2005 which would have prevented the problems we are now dealing with. Yet you want to blame the people.

  • @GeorgeKendall: I think we’re coming to an agreement here! I think it’s valid to point out the shortcoming you do and, like you, I suspect it occurred for reasons of communication rather than being driven by an agenda. I do have to say though that, having read the press release again, I’d be more comfortable if they used a slightly more cautious tone throughout. And I can see why that sort of thing might shake your faith.

    So I think the critique you’ve just offered is the appropriate kind, not just to the IFS but to any type of “objective analysis” (again, like scientists). While I realise Nick Clegg couldn’t go into an in-depth discussion of deciles in an interview, I’d have been happier if he’d said something like, “Look, I respect the IFS, but I disagree.” (He did sort of say this, to be fair.) “There are questions about whether the IFS analysis is valid – in brief, X – and you can check them out further at Y. In the analysis we used, the overall budget changes were shown to be progressive.” And if he’d avoided the confrontational style.

    Of course, as a Cabinet member he could not say, “Nevertheless, I have to admit that the IFS analysis does raise serious questions. After all, on measures Z and (um) A, it does indicate that policy is regressive. So perhaps we should reconsider.” But that’s the conclusion I’m inclined to draw, and I hope government might be considering privately.

  • Liberal Neil 28th Oct '10 - 6:20pm

    @Anne You repeatedly refer to attacks on ‘the poor’ in relation to reducing Housing Benefit to £21K a year.

    I work, my wife works part time, our income a is a bit above average but still ‘ordinary’, we are bringing up three children, and we had to choose to live somewhere we could afford and spend around £12K a year on housing, and both have an hour each way commute to work as a result.

    In what way are the people whose HB will be capped poorer than people like us whose taxes pay for their housing?

  • Liberal Neil 28th Oct '10 - 6:51pm

    @ George Kendall “It’s clear that the bankers caused the recession and the £50bn cyclic deficit that resulted from that recession. But the £100bn structural deficit was mostly because we were using taxes from a bubble economy to fund long-term spending commitments.”

    This is a very important point. Labour started to cause the structural deficit from 2001 onwards, with an acceleration fron 2005, which also meant we were were in a much weaker position to cope with the recession when it came.

    It is also the case that they failed to put in place some of the reforms which were needed to deal with areas of spending such as pensions, public sector pension provision and the consequences of an aging population.

  • Liberal Neil 28th Oct '10 - 7:50pm

    @ Oranjepan “The IFS are walking a tightrope to avoid being drawn into the political arena as sides are taken on the issue and I don’t think it helps their reputation for impartiality for opponents of the cuts to encourage the appearance that they are arguing in favour of one side over another.”

    Indeed. For example they keep stating that one of the reasons the current package is more progressive than it would otherwise be is the rise in income tax on income above £150K initiated by the last Government. This is true, but it is also true that the coalition have kept it, and it is part of their budget. They could have dropped it, and would have done if their aim was to protect the wealthy, but they didn’t. So it is now just one part of the overall package and there is no reason to single it out. The IFS’s decision to keep singling out this aspect does leave them open to the accusation that they are being partisan.

  • Chris Riley 28th Oct '10 - 8:22pm

    @Liberal Neil

    Can I suggest, if you’d like to work out why Labour spent in the years around 2002, to look up some information about the recession in the US and Europe that happened then? There is plenty of information available about the collapse of Enron – perhaps you have heard of it? – and the fall of Arthur Andersen – at the time, one of the largest financial services companies in the world. You might also like to look up the dot.com crash as well. You may also have heard of those. As a consequence, most developed economies in the world went into recession.

    Now look up the UK recession around the same time. Oh, hang on, we didn’t have one. Wonder why?

    With the gift of hindsight, you can see Gordon Brown made mistakes, especially towards the end of his tenure, but unless you understand that he also got a great deal right, you cannot hold an objective, impartial and informed view.

    Ironically, had we gone into recession in 2002, Labour would have stood a significantly greater chance of losing the 2005 election. The Tories would have stood absolutely no chance in the last recession as they got every single piece of potential economic policy utterly wrong throughout the whole period. So, it is one of politics’ great ironies that had he been less able in the 2002 downturn, he could have escaped having presided over the entirely unavoidable recession we’ve just had, and he’d quite likely be PM now.

    Think on that for a moment.

  • @Oranjepan

    As the link should make clear the ESRC does comply with regional and gender balance prescriptions in order to obviate accusations of bias, and it would be foolish to accuse the distinguished members of the board of being unthinking automatons who willingly dance to the tune of a party interest group. At the same time it is their job to defend the interests they represent and this should be acknowledged.

    This is a minor point, but it’s scary you have no concept of how research councils operate with respect to bias. Grant applications, such as those that fund the IFS, will be submitted to independent review. Of course every step of the review and award process comes with the bias of its participants, however to think that this would produce a system where the biases of the ESRC dictate the results of ~independent researchers that they fund is extraordinary. It would mean an orchaestrated research fraud on an unprecedented scale. You really need to have better evidence than simply the research contradicting your assumption to make such accusations. You tread very dangerous ground when you develop a habit of wishing awkward findings away when they contradict your ideology.

  • @Oranjepan
    “However Anne’s comments that the cuts constitute ‘an attack on the poor’ are extreme hyperbole”

    No they are not, it is true.

  • Chris Riley 28th Oct '10 - 9:59pm

    @George

    Absolutely right about the latter part of Brown’s tenure. He got it wrong.

    But by caricaturing a man who was often a very effective Chancellor as being unutterably incompetent, the Lib Dems also fail to learn lesson just as the Labour party do. And also by pretending that the Tories have suddenly become 100% right on the economy, the Lib Dems could be making a grave error.

    None of us know what lies ahead. However, the Tories got it very, very badly wrong on the economy during the recession, and the British public seemed to judge, probably correctly, that the Lib Dems’ economic policy at the time was correct. By hitching the Lib Dem wagon to a party who couldn’t come up with a coherent, rational and sensible response to recession and assuming that at some point between December 2009 and May 2010 they’d suddenly worked out how a recovery might work, not only could the Lib Dems have made matters worse, but they may also have jettisoned the actual correct response in doing so.

    That’s why now is an exceptionally poor time for Lib Dems to be making wild accusations about Brown’s economic competence. They may have made, essentially, exactly the same mistake – binning a winning plan – for exactly the same reasons – pure political advantage. Brown is yesterday’s man. He’s gone. You won that fight already.

    Besides anything else, the party is better than that. Leave the tribalist sniping to Labour and the Tories. The Lib Dems should be able to acknowledge that both parties have their good and bad points, and good and bad policies, and the best policies are a synthesis of the best of everyone’s ideas. That’s a mature way to run a country, not by demonising political figures from other parties based on caricatures and imperfect information.

  • Whilst I’m on a very dull roll, I might point out that I also work with the ESRC and a lot of people who are funded by the ESRC.

    Accusing them of bias is absurd and dreadfully informed. It reflects very badly on the judgment of the writer.

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