Leading article: IFS 1, Coalition 0

Thursday 26 August 2010 00:00 BST

The publication of the Institute for Fiscal Studies report for the End Child Poverty campaign looks destined to become a defining moment of this Government's early months. In concluding that the emergency Budget was not, as the Chancellor had described it, "progressive", but "regressive", the IFS was only reinforcing and fleshing out part of the analysis it had produced immediately after the Budget in June. But in a late August short of news, at a time when the trade unions are preparing a "hot" autumn of protest against public spending cuts, it fell on receptive ears.

The Government's critics were able to get up a veritable head of steam before first the Treasury, in characteristically dry terms, and then Nick Clegg, in rather more spirited style, finally essayed a response. Taking advantage of a public appearance in London yesterday, the Deputy Prime Minister described the IFS report as "by definition partial", saying it excluded measures the Government was proposing to help people into work. He might also have pointed out, but did not, that the IFS report projects the effects to 2014, while the Government refers to the next financial year.

A recognition of the difference in time-scale, though, does not mean that this argument will, or should, go away. In a sense, it is one Mr Osborne brought upon himself by using the word "progressive" in the first place. But that description, like the Government's stress on "fairness" also reflects the constraints of coalition. Protecting those least able to protect themselves was a requirement the Liberal Democrats brought to the table. It is as important, if not more important, for Mr Clegg to be able to defend the Budget as it is for the Chancellor and the Government as a whole.

The debate needs to go on, not just between ministers and a London think-tank (however respected it might be), but in Parliament and in the country. "Fairness" means different things to different people, not just to rich and poor, but, say, to those without jobs and the low-paid. Recipients of public money, in whatever form, are always likely to be more vulnerable than others when spending needs to be cut. And the 5 per cent loss projected by the IFS for low-income households to 2014 might be judged in the light of the income cut many employees have suffered during the recession.

This week's first round in the "progressive/regressive" debate was won by the critics before the Government had even woken up to the fact of the debate. Its single consolation is that this was only Round One.

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