The Institute of Fiscal Studies (IFS) claimed poorer families will suffer most from stringent welfare cuts such as slashing housing benefits.
But deputy Prime Minister Nick Clegg, whose reputation relies on convincing the electorate that the Budget is fair, criticised the “partial” IFS report.
He said: “If you just look at who is receiving benefits then, in a sense, you don’t ask the most important question of all – how you can relieve poverty and make Britain fairer.”
He added: “[It is a] single snapshot that simply doesn’t provide the full picture of what we are trying to do.”
He was joined by financial secretary Mark Hoban, who said the report made “some fairly challenging assumptions about the impact of some of the welfare reforms.”
The IFS’s conclusions were supported by the National Institute of Economic and Social Research, another respected thinktank. Simon Kirby, an economist, said the work appeared “very robust”, and added that the situation may be even worse than the IFS suggested because its model did not account for spending cuts.