THE UK coalition government’s tax and welfare policies have shifted money from the poorest to the better off, a study by economists has found.
New research showed reductions in benefits financed cuts in taxes, with an income transfer from the poorer half of households to “most of the richer half”, although the wealthiest were also hit.
The study, by academics at the London School of Economics and Essex University’s Institute for Social and Economic Research found that the “clear losers” include lone-parent families, large families, children and middle-aged people.
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The report said that the poorest five per cent in the country in terms of income lost nearly three per cent of what they would have earned if Britain’s tax and welfare system of May 2010 had been retained.
With the exception of the top five per cent, who lost one per cent, the better-off half of the country saw an increase of between 1.2 per cent and two per cent in their disposable income. The changes brought in by the UK government, including a cut in the top rate of income tax from 50p to 45p, helped the one per cent earning the most make a small net gain.
SNP MSP Jamie Hepburn said the findings were “damning evidence” of the way the Conservative-Liberal Democrat government at Westminster had targeted the poorest individuals in society since it came to power in 2010. The report was published as SNP leader Nicola Sturgeon promised 30 hours of free childcare to all 3, 4 and eligible 2-year olds by the end of next parliament.
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