Thursday, 29 May 2014

Where are public sector cuts really?

An incredibly helpful piece from Jonathan Dupont gives the answer and shows how salience is so key in understanding economic policy: boring things like indexation are just not salient to voters.

1. capping each household’s benefits to average take-home pay will save only £387m a year
2.  By far, the biggest saver for the government has been the early decision to switch the indexing of benefits, tax credits and public sector pensions to CPI. By 2018-19, the OBR estimates that this will save £6.6bn in total a year.



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