NB: The green line on the graph is the one to watch.
The Treasury graph below shows that, as a percentage of net income, the poorest 10 per cent pay more than every other group, with the exception of the richest 10 per cent. Osborne’s claim that those on the highest incomes will pay more, not just in cash terms (a less progressive measure), but also as a proportion of their income is therefore wrong.
If you strip out the pre-announced measures from the Budget (the black line), the graph shows that the poorest 10 per cent have actually lost the most from the Spending Review. The overall effect of the measures announced today is therefore clearly regressive.
Don’t forget, too, that the poorest, who have to carefully balance food and heating costs, can afford such losses far less than the richest.
One expects the Institute for Fiscal Studies will have a lot more to say about this over the next 48 hours.