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Clegg slams IFS Budget analysis

Deputy Prime Minister Nick Clegg has attacked the Institute of Fiscal Studies’ Budget analysis claiming it fails to take into account other Government policy initiatives.

In a column in today’s Financial Times, Clegg says the study ignored the capital gains tax increases for higher-rate tax payers and measured the Budget’s impact “solely on the basis of how much money people could be receiving from and giving to the state at a single moment”.

Yesterday’s IFS report said “the tax and benefit changes announced in the emergency budget are clearly regressive” hitting “the poorest households more than those in the upper-middle of income distribution”.

Clegg says this distributional analysis only tells part of the story with a couple receiving an extra £5 a week representing fairness “in the language of the IFS”, but that if “the government helps that couple find work” and they have a shared income of £20,000 the fact this couples lives are better off “disappears from the statistics”.

He adds that over time, coalition policy “will help the economy to grow and create opportunities that would be destroyed if we allowed borrowing to continue unchecked”.

IFS senior research economist for direct tax and welfare James Browne says the £825m raised annually by CGT rise is “probably not enough to significantly alter our conclusions”.

He says Clegg writes about “fairness whereas what we have been talking about is progressivity, whether the richest or the poorest lose most as a percentage of income”.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Nick Clegg is a typical politician (a liar) Of course the poor and vulnerable will be worse off. His endorsement of the witch hunt against disabled people receiving DLA is sickening.

    His endorsement of the capping of housing benefit is equally sickening (claiming a handful of high claims is reason to cut ALL housing benefits shows what a git he really is)

    He is a Tory puppet, Cameron states something and Clegg nods in agreement due to his desperate wish to cling to his little bit of power.

  2. I support the emergency budget plan made by the coalition, you won’t expect a country in huge debt but would still be so generous to everyone. The benefit cut is necessary and of course it will hit the poor as they need more state benefit or support than the rich. The housing copping is one of the best and fair policies. You can’t expect someone never work but can still live in houses that worth more than £1m because they have 3-6 kids.

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