IFS: Labour hit the rich, Tories and Lib Dems hit the poor

Forget the spin that yesterday’s Budget was “progressive”, with policies that make “the richest pay more than the poorest”. Actually, don’t forget it: denounce it as a filthy lie. The exact opposite is true.

It’s been well noted over the last day that George Osborne is guilty of subterfuge in publishing a distributional analysis that ignored policy changes applying after 2012-13, that included Labour’s NI increases, and that omitted some of the new policies in the Budget.

And now, thanks to the Institute for Fiscal Studies, we have a clearer picture. And it’s stunningly different. This chart shows the impact on different income groups, by 2014-15, of the tax and benefits changes Labour introduced since the financial crisis broke and also the effects of the policies announced yesterday:


Labour’s are textbook egalitarianism, hitting the richest hardest and the poorest hardly at all. Yesterday’s Tory/Lib Dem policies are the exact opposite.

The IFS adds that it hasn’t been able to take into account “cuts to housing benefit, DLA [disability living allowance] and reforms to in-year changes to tax credit awards”. But: “These are all likely to hit the poorest half more than the richest half.”

Funny how it doesn’t get called ‘class war’ when you attack the poorest.