Buoyant: George Osborne on a visit to a building site in Essex yesterday . Families will be better off this year than they were when the Coalition came to power, independent experts said yesterday. In a boost to George Osborne, the Institute for Fiscal Studies said it was ‘very likely’ that household incomes would be higher this year than in 2010. The Chancellor’s claim that families would be £900 better off in 2015 was one of the key Tory messages in Wednesday’s Budget. The IFS also raised serious questions about Ed Miliband’s much-repeated counter-claim that families are £1,600 worse off than they were in 2010. In its annual post-Budget briefing yesterday, it suggested the Labour leader’s figure was out of date and failed to take account of rising pensioner incomes, surging employment or changes to the tax and benefit system. The think-tank’s verdict potentially deals a fatal blow to Mr Miliband’s claims of a cost of living ‘crisis’. In a further blow, the IFS said inequality in Britain had fallen under the Coalition. It also said Labour’s plans were so lax that Mr Miliband might borrow up to £25billion a year more than the Tories – piling up Britain’s £1.5trillion national debt indefinitely. But it did warn that the impact of coalition cuts had fallen most heavily on the poor, as a result of reductions in benefits. Mr Osborne seized on the IFS verdict last night as evidence that the Government’s plans are starting to deliver higher living standards for families despite the years of austerity needed to deal with the huge budget deficit left by Labour. The Chancellor said: ‘This is a very significant moment for our economic debate: on the day after the Budget, the independent IFS have confirmed the Office for Budget Responsibility forecast that living standards are set to be higher in 2015 than in 2010. ‘This is more evidence that our plan is delivering for Britain’s families, and it demolishes Ed Miliband’s central claim in this election. I’m the first to say that the job of repairing our economy isn’t done, because the British people are still paying a huge price for Labour’s great recession, but Britain is on the right track and we must not turn back.’ The debate over living standards provoked a furious row between Labour and the Conservatives during Wednesday’s Budget. The IFS said Labour’s claim was based on figures from the Annual Survey of Hours and Earnings, covering the period 2010-2014. Economist Robert Joyce said it was true that these figures show average earnings fell during this period. But he said more recent data showed earnings are now ‘growing’. And he warned the Labour statistics give only a partial view of total household income. The figures do not include pensions, which have received a substantial boost. Because they are gross figures they also do not include the impact of tax changes. And they do not reflect that fact that employment is up by almost two million – meaning many people who previously had no income are now earning. Mr Joyce said: ‘It is reasonable to think that real average incomes will surpass pre-crisis levels in 2015.’ The Chancellor’s claim that families would be £900 better off in 2015 was one of the key Tory messages in Wednesday’s Budget . He did not directly endorse Mr Osborne’s £900 figure, but said it was based on a ‘quite reasonable measure of living standards’. He said the IFS’s own forecasts also suggest a significant rise in living standards this year. The IFS ruling was not all good news for Mr Osborne. It said there was ‘no cause for celebration’ as Britain has suffered ‘by far the slowest recovery in modern history’. IFS director Paul Johnson said that real incomes were ‘very likely’ to be higher this year than in 2010. But he added: ‘We are, for sure, worse off than we could reasonably have expected to be back in 2007, or indeed back in 2010.’ The IFS also assessed Mr Miliband’s claim that the Coalition has produced a ‘recovery for the few’. Mr Johnson said research showed that ‘across the huge majority of the population, inequality has fallen since 2010’. The total burden of austerity since the start of the recession has fallen most heavily on the top 10 per cent of earners. But, if Labour raids on the rich before 2010 are stripped out, it is the poorest 10 per cent who have lost the biggest proportion of their income, because of cuts to benefits. Those in the middle have been left ‘remarkably unaffected,’ Mr Johnson said. Shadow Chancellor Ed Balls said the findings were a ‘damning verdict’ on the Government. Ed Miliband claimed that families are £1,600 a year worse off compared to 2010 . In the aftermath of Wednesday’s Budget, the Tories and Labour have clashed bitterly over what will be a key General Election battleground: Are households better off now than in 2010? Here, the Daily Mail sorts the claim from the reality... What Ed Miliband says: In his Budget reply, the Labour leader repeated his claim – made ad nauseam in recent years – that: ‘This Chancellor has failed the working families of Britain. People are £1,600 a year worse off.’ Reality: The figure – the foundation of Labour’s ‘cost-of-living crisis’ – is based solely on gross earnings, not net incomes. This means it takes no account of any benefits a family receive or, crucially, the Coalition’s decision to raise the threshold for paying income tax to £10,600. To reach the figure of £1,600, Labour compares a person’s gross income with the Retail Price Index measure of inflation, which is discredited and has been replaced in the national accounts by the Consumer Price Index, which produces a significantly lower annual rate. Also, Labour’s calculation runs only to April 2014. Since then, wages have begun to rise significantly while the CPI inflation rate has fallen to just 0.3 per cent. What George Osborne says: On Wednesday, the Chancellor declared: ‘The facts show households on average will be around £900 better off in 2015 than they were in 2010 – and immeasurably more secure for living in a country whose economy is not in crisis any more.’ Reality: Ed Balls immediately rubbished the figure, which is based on a measure called Real Household Disposable Income per capita, on the grounds that it also includes income received by churches, trades unions and charities. The Office for National Statistics includes these organisations in the calculation – which compares all financial incomings with outgoings – because they ‘are financed by households and their sole purpose is to serve households’. Ed Balls rubbished Osborne's suggestion that families are £900 better off than they were in 2010 . However, a recent ONS research paper found that if they were removed from the figures, the measure would have delivered a marginally more positive result for ordinary households and Mr Osborne – not less so, as Mr Balls implied. The figures the Chancellor used are based on forecasts by the independent Office for Budget Responsibility up to the end of 2015. The OBR said disposable incomes will grow by 3.1 per cent this year, the fastest since 2001. Verdict: The hammer was brought down in favour of Mr Osborne by the hugely respected Institute for Fiscal Studies, which said average household incomes ‘are finally rising and probably will be higher in 2015 than they were in 2010’. It added that they could also be higher than their previous peak in 2009. Labour will point to the qualifying remark by the IFS that this ‘still represents by far the slowest recovery in incomes in modern history. Having household incomes crawl back up above pre-recession levels six or seven years after the recession hit is no cause for celebration’. But the verdict is still a bitter blow to the Two Eds – whose ‘cost of living’ fox has now been shot. Last year, Mr Balls said the issue that will be centre stage in the election was the same question posed by Ronald Reagan in his first presidential campaign in 1980: ‘Are you better off than you were four years ago?’ In the US, the answer back then was No – and it cost Jimmy Carter the Oval Office. The Tories will hope a Yes – albeit a qualified one – will similarly be enough to keep Labour out of No10. Wannabe Chancellor: Ed Balls still relies on his mother-in-law for help with maths . He wants to be Chancellor of the Exchequer. But Ed Balls still relies on his mother-in-law for help with maths. During an interview on Good Morning Britain yesterday, Labour’s shadow chancellor confessed he was relieved he had not been asked any maths questions live on TV. It came as he struggled to respond to George Osborne’s Budget and admitted he would not reverse any of the measures announced – including the new Help to Buy Isas. Mr Balls appeared on the ITV show in a bid to lead Labour’s post-Budget fightback. At the end of his interview a tired-looking Mr Balls expressed relief he had not been asked any tricky arithmetic questions. He told host Susanna Reid: ‘I was pleased you didn’t ask me any maths questions this morning.’ Asked how he was with fractions, Mr Balls replied: ‘Luckily my mother-in-law is a maths teacher so she is the expert when it comes to maths.’ A shocked Miss Reid interrupted: ‘You cannot tell me that the shadow chancellor relies on his mother-in-law to do his maths.’ Mr Balls said: ‘The kids think the mother-in-law is very good at maths teaching. You always rely on your mother-in-law.’ Later, on BBC Radio 4’s Today programme, Mr Balls admitted it was ‘good’ that Mr Osborne announced help for savers with the £1,000 tax-free savings allowance. He also said the Help to Buy Isa was an ‘interesting idea’ that would not be scrapped if Labour wins in May and that he would keep the rise in the personal tax allowance – to go up from £10,600 to £11,000 by 2017-18. Asked if there was anything from Wednesday’s Budget he would reverse, Mr Balls said: ‘I thought it was quite empty. I don’t think there was too much in it. There’s nothing I’m saying to you from yesterday that I need to reverse. What I will reverse is the plan for deeper spending cuts in the next three years than the last five.’
'Very likely' household incomes will be higher than in 2010, experts say . Osborne's claim that families will be £900 better off was key Budget pledge . Financial experts also raised questions about Ed Miliband's counter-claims . Labour leader said families are are £1,600 worse off than they were in 2010 . But a think-tank said Miliband's figure was out of date and not correct .