If you could point out to me where you read it, I am happy to discuss.....
Update - found the link -
BBC, and there's an explanation on BBC's Stephanie Flander's
blog why the Government and the Treasury think that way (it's disputed by others).
Quote:
Here's a stylized example, using numbers that are roughly similar to the real ones, but generously rounded for simplicity.
Say the average household in the bottom fifth has an income of around £200 per week. The government reckons that government services are so important to them, these benefits in kind are worth another £200 a week. The state plays a much smaller role in the life of the average household in the top fifth of the income distribution: they get benefits of kind of about £100 a week, to add to their weekly net income of £1,000.
The Treasury has looked at around two-thirds of departmental spending, and taken a best guess of how these different households will be affected by the cuts, including Health, Education, Communities and Local Government, Work and Pensions, and Transport. (Unlike the benefit analysis, the IFS has not said that there any glaring omissions from the Treasury's list.)
Their conclusion? The poorest will lose government services worth about seven per week whereas the richest fifth have lost services worth about 10 a week.
This is what lets the IFS conclude that the governments programme looks even more regressive, once spending cuts are added to the mix. That 7 is obviously worth a lot more to the poor family than the rich one . In my (roughly right) example, its worth just over 3 per cent of their net income, while the 10 hit to the top fifth is only 1%.
For the IFS, that is more or less the end of the story. But Mr Osborne and Nick Clegg - think it is relevant than the poorer family are getting a lot more from the state to start off with. That seven represents roughly 3% of their benefits in kind from the government whereas the 10 hit to richer households reduces their in-kind benefits by fully 10%.
If you think this sounds fishy, the Treasury doesn't provide all the details of the calculation, but I think the idea is that the bits of the state that have been hardest hit - like Higher Education - are often the parts that richer households use the most. Most of the subsidy for the poorest students has been protected. (Oddly, the same logic wasn't applied to child benefit and education maintenance allowances: middle class 16 year olds will keep their benefit, but their poorer peers will have lose their allowances.)
That is why the Treasury thinks the spending cuts will be fairly evenly spread in their impact, with the poorest taking a smaller hit than the rich - though they still need Labour's tax rises to say that the top fifth are hurting the most
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And from the Comprehensive Spending Review document, page 98
and on page 100
