IFS rubbishes David Cameron tax claim

The respected think tank calls the claim 'unhelpful and of little value'

 

David Cameron’s claim that working families could face a £3,000 tax rise under a Labour government has been demolished by the respected Institute for Fiscal Studies (IFS) as ‘unhelpful and of little value’.

Cameron made the claim yesterday in a speech outside Downing Street after visiting Buckingham Palace to inform the Queen of the dissolution of parliament. Cameron said that voters could:

“choose an economy that grows, that creates jobs, that generates the money to ensure a properly funded and improving NHS, a government that will cut taxes for 30 million hardworking people and a country that is safe and secure. Or you can choose the economic chaos of Ed Miliband’s Britain – over £3,000 in higher taxes for every working family to pay for more welfare and out-of-control spending. Debt will rise and jobs will be lost as a result.”

However the £3,000 claim was rejected by the IFS, which pointed to a number of flaws in the assumption. In a statement, the IFS said:

“There is little value in bandying around numbers which suggest either party would increases taxes by an average of £3,000 for each working household. We don’t know what they will do after the election. But neither of the two main parties has said anything to suggest that is what they are planning.”

IFS director Paul Johnson also called figure unhelpful, saying ‘you certainly cannot draw up such a precise figure’.

According to the respected think tank, Labour could meet its fiscal targets with £3bn in tax rises from 2018-19 – and not with the £15bn in tax rises from 2017-18 that Tory spin doctors claimed.

The IFS also said the £3,000 figure was a cumulative increase over parliament and not an annual increase, and that the Conservative figure assumed that all of the burden fell on only 17m working households rather than the 26.7m total households in the UK.

Conservative party chairman Grant Shapps initially described the £3,000 figure as ‘absolutely solid’. After yesterday’s intervention from the IFS, however, he changed his tune, calling it ‘guesswork’.

James Bloodworth is the editor of Left Foot Forward. Follow him on Twitter

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