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Deputy PM Nick Clegg’s claim that scrapping tax for Britain’s lowest earners is key to lifting people out of poverty was rubbished yesterday by new TUC research.
The election-conscious Lib Dem leader has squabbled with Tory pals over which coalition party was behind the rise in personal tax allowance to £10,000 a year.
But the move barely helps Britain’s worst-off workers because they pay little or no tax, according to an analysis by economist Howard Reed for the TUC.
Instead employers must pay five million workers surviving on poverty pay a living wage as the economy recovers and profits grow.
The report also argues that low-paid families need a boost to benefits and tax credits to meet the rising cost of basic goods.
TUC general secretary Frances O’Grady said: “The economic crash has led to the longest decline in living standards since the 1870s.
“Britain needs a pay rise but we must also defend and extend the in-work benefits that lift families — particularly those with children — out of poverty.
“The best way to make work pay is not only to spread the living wage, but also to reverse cuts in tax credits and make Universal Credit more generous for the working poor.”
The research features examples of fictionalised working households who, despite earning a living wage, would not be able to afford rent, food, school uniform or childcare.