Clegg’s ‘new age of austerity’ budget targets middle classes

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Mr Clegg said that the cuts would be funded by barring middle-class families from claiming tax credits, dumping the child trust fund and scrapping road-building projects.

He said voters were having to tighten their belts and the Government should do the same.

"We're entering into an age of austerity when all the political parties are going to have to have a rethink on public spending. All the old assumptions have evaporated because of the economic crisis and the knock-on effect it's going to have on several lean years of public spending," he said.

After a three-month study Mr Clegg was today revealing how he intended to pay for the £20 billion targeted tax cuts he announced last autumn.

He said: "Probably the biggest item of all is an over £3 billion saving by removing higher earners from tax credits altogether.

"It's a highly controversial thing to do. People who are well above average income might not feel that. I think it's entirely justified because tax credits are there to help people who are struggling."

Mr Clegg said that people like him who earn £60,000 a year, should not benefit from tax credits

The Liberal Democrats would also scrap the child trust fund that gives £250 to all 18-year-olds, which he describes as "a typical politician's play thing". The other biggest saving — around £1 billion — will come from shelving 90 per cent of the major motorway and trunk road-building programme.