George Osborne picks fight with Labour over benefit cuts

 
2 April 2013
WEST END FINAL

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George Osborne took on his critics today with a ferocious defence of benefit cuts and the lowering of the top rate of tax.

In a defiant speech, the Chancellor branded Britain’s welfare system as broken and vowed to “use every penny” to support hard-working people. Drawing clear battle lines for the 2015 general election, he hit out at “ill-informed rubbish” and “shrill, headline-seeking nonsense” condemning the Coalition’s welfare reforms.

Mr Osborne argued that an overall cap on benefits of £26,000 a year — set to hit London the hardest — was still regarded by most working people as “pretty high”. He said that the row over benefits was a “big political fight” — with both Labour and the Conservatives now tearing at each other to win public support for their stance on the cuts.

After days of battering by church leaders, charities and Labour over the shake-up, the Chancellor hit back, defending April as a key month with a series of benefit cuts coming in. The starting threshold for paying income tax rises to £9,440 and corporation tax is cut to 23p. “This month we will make work pay,” he said.

Labour believes that millions will turn against the Government for being “unfair” and rewarding the wealthy with the cut of the top rate of tax from 50p to 45p while families see their weekly budgets squeezed.

But Mr Osborne today branded the lower top rate of tax as an “ economic essential” to a thriving economy and pointed to the damage caused by the threat of the 75 per cent top rate in France. “If we’r e not careful, Britain risks being out-worked, out-competed and out-smarted by those hungry for a better life,” he said.

The Chancellor claimed that nine out of 10 working households would be better off as a result of the changes this month.

However, shadow Chancellor Ed Balls quoted figures from the independent Institute for Fiscal Studies suggesting that the average family will be £891 worse off this year because of tax and benefit changes since 2010.

Mr Balls said: “George Osborne should be straight with the British people and admit that millions on middle and low incomes are paying the price for his economic failure, while he gives a huge tax cut to millionaires this week.”

The Chancellor defended the overall cap, new restrictions on housing and council tax benefits, and many benefits rising by one per cent a year, saying: “ With all our welfare changes, we’re simply asking people on benefits to make some of the same choices working families have to make every day.

“To live in a less expensive house. To live in a house without a spare bedroom unless they can afford it. To get by on the average family income.”

Speaking in Kent to workers for supermarket Morrisons, whose slogan is “every penny matters”, he claimed that the tax and benefit changes were “all about making sure that we use every penny we can to back hard working people who want to get on in life”.

Treasury minister Greg Clark also warned of more pain as Britain has to slash its deficit by £4,000 per household — or more than £100 billion — to finally stop its debt mountain growing.

But ministers were accused of a “warped sense of social justice” as thousands of families in London will be hit by the overall cap from April 15.  The restriction is being first introduced in four boroughs —  Bromley, Croydon, Enfield and Haringey — before being rolled out across the  country.

“This is a worrying time for many Londoners as many benefit changes begin, and the first families will then be hit by the overall benefit cap in a few weeks time. Some will be hundreds of pounds worse off each week,” said Sarah Teather, Lib-Dem MP for Brent Central. “Ministers who claim that imposing sudden and draconian cuts on families with children is about ‘fairness’ have a warped sense of social justice frankly.”

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