Saturday, 16 March 2013

The Hardest Hit

The graph to the right, taken from the BBC news website, shows how austerity has hit different income groups, in terms of the percentage that their income has shrank. With benefits being cut, and VAT at the high rate of 20%, people are getting less and paying more so that the government can sort out its financial mess. You would expect that this would effect the people who had least within society, the people who make up the poorest income group.

However, the graph opposite shows that the hardest hit group is, surprisingly, the richest. Despite the scrapping of the 50% tax rate, they are receiving less and less from the government. Essentially, they are being left to fend for themselves, something that they, as the richest, are the best equipped to do. Things like the removal of money to help with the children is one of the key reasons for this, since parents are no longer getting child benefit if they are viewed as having enough money to be able to deal without it.

Yet, the graph also shows that the vulnerable, the poor, are the people who have had to pay the second amount. It is the people that are in the middle that have had to pay the least. Politically, this is understandable, since the rich are those who are generally expected to be able to handle things, and the poor will always be the victims of austerity.

However, the next few years have to be the years when the middle have to bare some burden. Small sections of society cannot be expected to bare the whole problem, and those in, say, the second or third richest bands may be the target of any new austerity measures.

The upcoming budget is probably going to be more of the same in terms of cuts, especially as the government has not exactly achieved the deficit cuts that it wanted to, but the focus must be away from policies which affect the poor more than they do the people in the middle. This will be a difficult thing to do, as any cuts to things like child benefits will hurt families even more, so it will be interesting to see how the government will attempt it.

Austerity, which is here to stay, is something that needs to be done very carefully. It needs to be spread out, it needs to be administered fairly, and it has to actually work. At the moment, the government isn't doing it that well, but the budget later this week could very well could be the moment that they try a new approach.

At least we have to hope they do.

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