In this note we look in more detail at the distributional impact of this welfare cut, in combination with the decision to increase the personal tax allowance by a further £235 in April 2013 and the announcement that the higher rate threshold would increase by 1 per cent a year from April 2014. Having considered this latest ‘fiscal squeeze’, we turn to consider what the OBR’s updated projections for earnings and inflation mean for the ‘wage squeeze’. Finally, we consider the longer-term consequences of these two effects for a series of stylised families.
| : Matthew WhittakerA man for all seasons? What the Chancellor can expect in the OBR’s Spring outlook
Chancellor faces tougher choices and tax rises if Britain is to ‘reach the end of the tunnel’ on austerity
‘Sugar Rush Spring Statement’ sees good news fade quickly as outlook for growth and living standards remains bleak