The IFS have taken the government's Emergency Budget from June in isolation and shown that the policies announced in it will have a regressive effect on their own.
However, the public won't simply be affected by the June Budget. The previous government also held a Budget just a few months earlier in March. This has two implications:
1. The policy decisions from June weren't made in a vacuum - they were adding upon policies that had just been announced in March. The June Budget did not reverse any of the March Budget, with the one exception of cancelling Cider Duty rises.
2. The impact on people's livelihoods will be total effect of both March's and June's Budgets. The IFS have ignored the impact of March's Budget and only reported on the impact of June's. This is not what is going actually happen to people.
So while this is of little economic relevance, it is more arguably of political relevance. It may tell us about the values of the new coalition government (albeit in a very limited way - see point 1 above). I hope the IFS realises it is engaging in a primarily political debate rather than an economic one.
UPDATE 11am: The IFS's report does contain the correct graph that includes the effect of all tax and benefit changes. This is the one that we should be focussed on.
Let me be clear - this is still a regressive picture, and it is not a graph I can take any joy from. It still shows that some of the poorest households will be among the hardest hit. Sadly that is just the nature of benefit cuts - cuts that would have been made whoever was in power. However it does appear that some of the more wealthy, particularly in deciles 7, 8 and 9, will not be feeling their fair share of the pain.
I have redacted my last criticism of the IFS. The full report is far more balanced than I gave the IFS credit for. It is End Child Poverty who have chosen to highlight the misleading graph.