So now we know. The IFS predicted yesterday that austerity will last till at least 2018, and a TUC report released at the weekend reveals that since cuts in benefits and tax credits are reinforced by cuts in public spending on which the poorest depend most, the combined impact will reduce the annual income of the poorest households by a third by 2017. That works out at a loss for them of £4,000 a year, or £77 a week. For those on benefit or on the minimum wage, that is a very big chunk taken out of a very meagre daily subsistence. For the richest tenth of the population, who anyway start from a hugely higher income that can much more easily absorb loss, the cut in their annual income is just 2.5%. Continue reading →