George Osborne given stark warning on cuts' impact
Institute for Fiscal Studies says chancellor's plan will cause 10% drop in family living standards
George Osborne's austerity programme will cut the living standards of Britain's families by more than 10% over the next three years as those on the lowest incomes suffer most from the tax increases and spending cuts designed to reduce the budget deficit.
A study from the Institute for Fiscal Studies, the UK's leading experts on the public finances, concludes that the chancellor's strategy will result in greater inequality and rising child poverty, throwing into reverse progress made in the final years of the last Labour government.
The bleak picture painted by the IFS will be used by opponents of the chancellor's austerity measures to call for a plan B to generate faster economic growth. There is likely to be further pressure on Osborne on Monday as the head of his independent commission on banking, Sir John Vickers, outlines measures for banking reform.
The IFS analysis, included in a new international study into the impact of the "Great Recession" of 2008-09 on 21 wealthy countries, says the most severe downturn since the interwar years will "cast a very long shadow in the UK", with the poorest 30% of households especially hard hit.
www.guardian.co.uk/business/2011/sep/12/george-osborne-warning-cuts-impact