Nick Clegg said ministers “fundamentally disagreed” with the IFS
Deputy Prime Minister Nick Clegg has launched a direct attack on a leading think tank after it branded the government’s Spending Review “unfair”.
The Institute for Fiscal Studies has said poorer families with children will be the “biggest losers” of the cuts.
But Mr Clegg told the Guardian newspaper that the IFS’s definition of fairness was “complete nonsense”.
He said it took account only of tax and welfare and ignored factors like access to public services and social mobility.
Labour has called the planned £81bn over four years a “reckless gamble” with the economy that leaves children “hardest hit”.
It has been estimated that the cuts will lead to the loss of 490,000 public sector jobs.
On Thursday, at a public question-and-answer session, Mr Clegg called for a more “balanced” assessment of what the coalition was doing and accused critics who were complaining its measures were “all very unfair” of “frightening people and that is not right”.
The IFS think tank argues that the Spending Review is “more regressive than progressive”.
Excluding the wealthiest 2% of the population, who the IFS assesses will be the hardest hit, it says the poorest 10% of the population will, on average, lose about 5.5% of their net income compared with roughly 4.5% for the top 10%.
In a direct response to the think tank’s criticisms, Mr Clegg told the Guardian that he and other ministers “fundamentally disagree with the IFS”.
“It goes back to a culture of how you measure fairness that took root under Gordon Brown’s time, where fairness was seen through one prism and one prism only, which was the tax and benefits system,” he said.
“It is a complete nonsense to apply that measure, which is a slightly desiccated Treasury measure. People do not live only on the basis of the benefits they receive.
“They also depend on public services, such as childcare and social care. All of those things have been airbrushed out of the picture by the IFS.”
He said “shrill allegations” that the state was going to be drastically shrunk were incorrect.
“We are going to spend 5% more of national income on the state at the end of this process than Tony Blair and Gordon [Brown] were in 1997. We are going to employ 200,000 more people in the public sector at the end of this process.
“I think it is a cavalier misrepresentation to claim somehow it is a scorched earth policy.”
The Treasury had already rejected the IFS’s claims, but BBC economics editor Stephanie Flanders said its analysis had excluded a third of the benefit changes being proposed and did not factor in the impact of all the changes right up to 2014-15.
Another respected think tank, the OECD, has described the government’s measures as “tough, necessary and courageous”.
Among the changes proposed are a time limit on some incapacity benefits and reforms to tax credits, housing benefit and child benefit.
The aim of many of the changes is to cut long-term welfare dependency and Work and Pensions Secretary Iain Duncan Smith told BBC Two’s Newsnight that those out of work must make “reasonable efforts” to find employment.
“The truth is there are jobs. They may not be absolutely in the town that you’re living in – and this is the key point – they may be in a neighbouring town,” he said.
“My point [is that] we need to recognise that the jobs always don’t come to you – sometimes you need to go to the jobs.”
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