Why Nick Clegg’s attempts to redefine ‘fairness’ don’t stack up


10:10 am - August 27th 2010

by Nicola Smith    


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Yesterday’s FT featured an opinion piece from Nick Clegg, where he set out his refutation of the IFS’s analysis.

The Deputy Prime Minister is now arguing that fairness is about more than a ‘purely numerical’ view, and that income distribution only tells part of the fairness story.

But, as with previous attempts, this argument does not stack up.

Nick Clegg’s first criticism of the IFS analysis is that its statistics are misleading. This is an incredible claim. In fact, it was the Budget’s own distributional analysis that missed out one third of its benefit and tax credit changes.

The DPM also claims that the IFS make ‘impossible’ assumptions on DLA and on Tax Credits. Again, this is wrong. The Government’s own analysis shows that they presume 20 per cent of DLA claimants will lose their benefits as a result of the Budget, and IFS have simply used a random allocation method to remove benefit from the number of claimants required to reach the Government’s savings.

On Tax Credits, the assumptions are also sound. To model the impact, IFS have reduced all Tax Credit awards by the percentage amount needed to reach the savings the Budget identifies. If anything this method undercounts the impacts on the worst off – the policy detail already indicates to us that specific Tax Credit changes will hit the poorest more than those who are better off (for example, the £2,500 disregard for falls in in-year income, which by definition will only impact on those who see a reduction in their in-year earnings).

Finally, Nick Clegg asserts that by leaving out the Capital Gains Tax the IFS’s distributional analysis is flawed – but the IFS have demonstrated that the value of these changes is minimal compared to the benefit changes it documents. Including the CGT change would not alter the fact that the poorest lose significantly more than the Budget’s analysis indicated.

Nick Clegg them moves on to criticise the very idea of distributional analysis – surprising given that the Budget and the announcements surrounding it gave such prominence to this method of assessing fairness. He argues that fairness is about social mobility and policies such as a simpler welfare system and a pupil premium that will help the worst off.

The implication is that poverty and income inequality aren’t a problem as long as poor people who work hard are able to achieve improved outcomes. This is a contentious view, and the argument that social mobility can be achieved without reference to income levels is misleading. As we showed last week, the evidence on social mobility is clear – numbers do matter. If you don’t reduce income inequality, social mobility will continue to get worse.

The claim the that Budget is progressive was always far fetched – this latest attempt to defend the Budget’s progressive credentials only serves to further illustrate its flaws.

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About the author
Nicola is the TUC's Senior Policy Officer working on a range of labour market and social welfare policy. She blogs mostly at ToUChstone.
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Reader comments


Oh my, who to believe, a DPM with clear vested interests on a party and national level who is probably glossing over the problems with the budget, or a TUC worker with vested interests who has already tried to mislead with (in Left Foot Fwd style) an only partially relevant graph and a lot of conjecture.

DECISIONS DECISIONS.

Talk about moving the goalposts! Why can’t he just admit that he got it wrong, and that he has no claim at all to the epithet ‘progressive’?

[Clegg] argues that fairness is about social mobility and policies such as a simpler welfare system and a pupil premium that will help the worst off.

The LibDem part of the coalition have been waving the ‘pupil premium’ about as if it will do everything short of curing cancer (see also today’s coverage of Barnardo’s criticism of the state school system). Clegg will be stuck with redefining ‘fairness’ as ‘what George Osborne said’ – and we’ve still got the cuts package to come.

Has there ever been a man in history who has thrown his principles to the wind in such a vigorous manner in the pursuit of power?

Nick Clegg gives the word ‘Liberal’ a bad name, unless it’s applying to the liberal use of lies in what he says.

Love the way the IFS is your friend while it supports your arguments (as it did in the televised ‘debates’ for NC) – but now it’s showing the budget for what it is (an attack on the least well off to protect the wealthy) – suddenly it’s all discredited.

Is Nick Clegg stupid? Does he really believe he can convince the country that the majority are ‘better off’ when their living standards are being cut daily?

Does the fool realise the impact inflation is having on the poor? Benefit cuts are one thing, but the biggest tax of all is in our food prices.

Oh there’s going to be a lot of blood on the streets.

“When I use a word, it means just what I choose it to mean – neither more nor less” said Nick Clegg in rather a scornful tone. (with apologies to Lewis Carroll)

I have never seen a politician reduced so quickly from man of principle before an election to such a traitorous piece of filth.

Clegg has become the back half of The Human Centipede (don’t look that one up if you’re of a nervous disposition or read the Daily Mail)

4 Absolutely
Nick Clegg is nothing more than a tory glove-puppet. I don’t live too far away from his Sheffield constituency, in fact two of my colleagues live in Dore, I’d be surprised if Clegg gets re-elected in the next election.

‘Moving the goalposts’ is exactly right. Clegg’s approach in general seems to be to settle on a policy and then come up with ad hoc definitions of the objective that policy supposedly aims at. Remember the £10,000 tax threshold that was initially supposed to make taxes fairer by ensuring that the worse-off paid less tax as a proportion of their income than the better-off? Then the IFS pointed out that actually it would have the opposite effect, and suddenly we were told that the objective of the policy was actually to ‘make work pay’. Now we have Clegg putting even more distance between himself and any suggestion that ‘fairness’ has anything to do with reducing income inequality or asking better-off people to bear more of the burden of tax and spending changes than worse-off people.

” Remember the £10,000 tax threshold that was initially supposed to make taxes fairer by ensuring that the worse-off paid less tax as a proportion of their income than the better-off? Then the IFS pointed out that actually it would have the opposite effect”

Oh ho ho, citing a flawed report from the IFS to defend the IFS! Amazing!

Lee Griffin, I’d be interested in what you think the conjecture is.

The graph that I used came from the End Child Poverty press release (which was all that was available at the time the embargo was lifted), and shows the impact of the measures announced in the June Budget for families with children. If you think that a graph showing the cumulative impact of all measures that will come into place over that period (including those introduced by the previous government) is a fairer assessment, then you can see it in the IFS’s research: http://www.ifs.org.uk/bns/bn108.pdf. The key conclusions don’t change – the impact remains regressive.

I’ve read the report Nicola, my stance remains…you’ve publicly gone out there with a somewhat sensational and over-egged version of the truth. It’s irresponsible, as irresponsible as the DPM. I’m not sure how I’m meant to take the word of one person who is clearly attempting to mislead over another who is clearly attempting to mislead.

Dear Lee – I think we will just have to agree to disagree on this on. Best, Nicola

Seems to be your stock answer when criticised on your presentation, it’s a shame you have no accountability

13. gastro george

Clegg was on even worse ground when he was trying to explain that the report left out the prospect of moving the poor off of benefits into jobs – which he claimed was one of the coalitions main aims. But this argument is fatuous as it is impossible to quantify changes in people’s status that might happen at some time in the future (and, given the rise in unemployment, is unlikely to happen anyway).

I forget which report it was showed that the best way to move people out of poverty was to GIVE THEM MORE MONEY.

The coalition will do the opposite.

Lee,

“Seems to be your stock answer when criticised on your presentation, it’s a shame you have no accountability”

I think it would help if you gave examples of where you thought Nicola was giving “a somewhat sensational and over-egged version of the truth”. It is a bit hard for her to respond to your accusations that she is trying to mislead us when you don’t give any details.

Yes, Lee, I’m genuinely confused by why you think the IFS report is partial. I accept there’s disagreement over whether the previous government’s measures should be included or not, but the IFS report allows for that.

Clegg does seem to come up with terrible excuses on the hoof. The idea that fairness is not numerical is either ludicrous or it’s a crude philosophical notion of equality of opportunity over equality – which I suppose is possible for a liberal. Either way it doesn’t trump the “The IFS report doesn’t take into account measures that haven’t been announced or even budgeted for yet” defence.

Why does Clegg not just join the tory party? It would be the honest thing to do.

Lee –

“citing a flawed report from the IFS to defend the IFS”

– my point wasn’t so much about the content of the report, but about the goalpost-shifting response of the Lib Dems to it. Still, I’d be interested to hear what you think the report’s flaws were.

I’ve heard various criticisms of it from Lib Dems but they’ve tended to be along goalpost-shifting lines. The stock response is: ‘it makes no sense to criticise a tax cut on the grounds that it doesn’t benefit non-taxpayers, because it’s *self-evident* that a tax cut doesn’t benefit non-taxpayers’ – which is every bit as dimwitted as ‘it makes no sense to criticise an inheritance tax cut for millionaires on the grounds that it doesn’t benefit ordinary people, because it’s *self-evident* that an inheritance tax cut for millionaires doesn’t benefit ordinary people’.

I’ve also come across ‘since we’re aiming for full employment, we can safely ignore non-taxpayers because the threshold change will increase equality for all those in work’ – which is beyond ludicrous because 1) we’re not going to achieve full employment any time soon, 2) many working people *are* non-taxpayers (e.g. those working part-time for minimum wage), and 3) even among those in work, the £10,000 threshold benefits households in which two people each earn over £10,000 more than it does lower-earning households.

What ‘flaws’ were you thinking of? I’m curious, because the logic of this seems pretty inescapable to me – it’s a plain fact that a tax threshold rise is of most benefit to those whose earnings are above that threshold, of less benefit to poorer taxpayers, and of no benefit to still poorer non-taxpayers. So whatever merits the policy has (e.g. ‘making work pay’ for those moving from benefits into work), it certainly doesn’t serve to shift the burden of taxation from lower to higher earners. Does it?

Leee – what is the bit which is “over-egged” – tell me. If I’d written this piece, it would be over-egged 🙂

Nicola has made straightforward points. You’re not actually giving examples to back up your point.

I think some of us are being too harsh on Nick Clegg and the Liberal Democrats. To be fair to most of them and NC, they have always been spineless bastards. I have always regarded the Lib Dems as the hammer of the poor ever since they refused to back plans to replace the regressive Council Tax with a progressive local income tax.

Old Nick obviously finding the concept that the weakest in society would have the tax burden removed from their backs and moved it onto people who can shoulder the burden too repugnant for words.

Now the English are waking up to the fact that this snivelling little rich kid is in it to back up other snivelling rich kids? Good, but I am sorry you had to wait until after the election to find out what we North of the border knew


Reactions: Twitter, blogs
  1. Liberal Conspiracy

    Why Nick Clegg's attempts to redefine 'fairness' don't stack up http://bit.ly/cSOTmI

  2. Steve Gardiner

    RT @libcon: Why Nick Clegg's attempts to redefine 'fairness' don't stack up http://bit.ly/cSOTmI

  3. Louisa Loveluck

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  4. kevinrye

    RT @libcon: Why Nick Clegg's attempts to redefine 'fairness' don't stack up http://bit.ly/cSOTmI

  5. Kate B

    Bet Clegg looks back fondly on the days when nobody knew who the fuck he was. I certainly do. http://bit.ly/asBxBV

  6. george hopwood

    RT @hangbitch: Bet Clegg looks back fondly on the days when nobody knew who the fuck he was. I certainly do. http://bit.ly/asBxBV

  7. Lee Griffin

    RT @libcon (paraphrasing) What happens when one vested interest attacks another…we all lose! http://bit.ly/cSOTmI

  8. Kate B

    Bet Clegg looks back fondly on the days when nobody knew who the fuck he was. I certainly do. http://t.co/WKZiXCU via @libcon

  9. Ulrike Jensen

    RT @hangbitch: Bet Clegg looks back fondly on the days when nobody knew who the fuck he was. I certainly do. http://bit.ly/asBxBV

  10. Malcolm Evison

    Why Nick Clegg’s attempts to redefine ‘fairness’ don’t stack up | Liberal Conspiracy: http://bit.ly/a4Ar8v via @addthis

  11. Graham Mumford

    RT @hangbitch: Bet Clegg looks back fondly on the days when nobody knew who the fuck he was. I certainly do. http://t.co/WKZiXCU via @libcon

  12. Oxford Kevin

    Why Nick Clegg’s attempts to redefine ‘fairness’ don’t stack up | Liberal Conspiracy http://t.co/z2gc5g6 via @libcon

  13. Clare Cochrane

    Nick Clegg's refutation of IFS condemnation of the budget doesn't stack up http://tinyurl.com/2wcozc2 @libcon

  14. Seff

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  16. SMS PolicyWatch

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  17. Politics of UK

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  19. Pierre Bitaudeau

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  20. Wendy Seabrook

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  21. Therese

    Yet more reasons why Nick Clegg should be forbidden from using the word "fairness" ever again. :-\ http://bit.ly/b3lzZM





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