Courtesy of Ed Balls, the IFS graph below made an appearance at PMQs today. As Ed Miliband pointed out, it shows that the poorest third will lose three times as much as the richest third next year.
It’s worth noting that Labour’s plans would likely have been regressive too, if less so than the coalition’s. Public spending follows need and it would have been difficult for Alistair Darling to halve the UK’s £160.6bn deficit without hitting the poorest. But this is still a smart line of attack by Labour. As growth continues to disappoint, the question of how to distribute scarce resources will become even more important. The current debate over stimulus and cuts will soon be secondary to this.
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