Citywire for Financial Professionals
Stay connected:

View the article online at

Osborne: I don't protect pensioners

George Osborne defends his record after Labour calls on chancellor to tear up his Budget following U-turn on welfare cuts.

Osborne: I don't protect pensioners

(Update) Chancellor George Osborne has defended his management of the economy after a call by Labour that he tear up his Budget and ‘start again’, following his decision to cancel £4 billion of welfare cuts.

Speaking in the House of Commons today after the resignation of work and pensions secretary Iain Duncan Smith in response to a row over cuts to personal independent payments to the disabled, Osborne praised his former colleague and said he was ready to ‘listen and learn’ where mistakes were made.

The chancellor denied accusations that he had protected pensioners at the expense of younger people receiving in-work benefits, claiming he had made ‘substantial’ cuts from the pension budget while also giving people a ‘generous’ offering.

Under pressure

Osborne claimed he was committed to maintaining the current state pension model in defiance of Duncan Smith who at the weekend urged the government to re-think its expensive ‘triple lock’ on the state pension.

‘Some people say to me, in the same breath, that we are not saving enough from pensioners, while at the same time complaining about everything from long-term increases in the state pension age to keep pace with rising life expectancies, to restrictions on the lifetime allowances on the largest pension pots,’ Osborne told MPs.

‘The truth is we have made substantial savings from pensioner welfare, around half a trillion pound saving pot. They are vital to the long-term sustainability of our public finances. But we have made these savings in a way that enables us to go on giving people who have worked hard all their lives, a decent, generous basic state pension that we committed to in our manifesto. I’m not going to take that away from people,’ he said.

In his statement the chancellor confirmed he had dropped the planned cuts to disability benefits, sparking further attacks from Labour MPs over how he will cover the gap in last week’s Budget.

Budget hole

Osborne had earlier suffered the embarrassment of hearing the head of the Budget watchdog tell MPs that his chances of reducing a surplus by 2020 had fallen.

At a hearing of the Treasury Select Committee, Robert Chote, chairman of the Office for Budget Responsibility, said the decision to reverse the cuts would lower the chances of Osborne meeting his goal of having a £10 billion surplus by 2020.

‘You have effectively now something that looks more like £8 [billion] and a bit, rather than £10 billion. At the time horizon it doesn’t make a huge difference to the precise number, but if you have a lower surplus the chances of actually turning out to be a surplus is lower,’ he said.

In a heated commons showdown yesterday evening, shadow chancellor John McDonnell (pictured) told financial secretary to the Treasury David Gauke that his Treasury boss needed to 'start again' over the Budget.

‘Within five days an enormous hole has appeared in the Budget, isn't it the prudent thing for the chancellor to do to is withdraw this Budget and start again?' he asked. 'This is no way to deliver a Budget and no way to manage an economy.'

Labour veteran Dennis Skinner, MP for Bolsover, quipped the chancellor had given eight Budgets but that it was only cats who had nine lives.

Earlier prime minister David Cameron had praised Osborne: 'In two weeks’ time we will introduce the first ever national living wage, giving a pay rise to the poorest people in our country,' he said.

'None of this would be possible if it wasn't for the actions of this government and the work of my right honourable friend the chancellor, in turning our economy around.'

8 comments so far. Why not have your say?

Anonymous 1 needed this 'off the record'

Mar 22, 2016 at 17:34

This is just typical of this "Windy" Government - don't think things through before pushing them out to the wider audiance.

Pensions now this!! - I guess the the main thing is they have backed down - at the expense of looking like a bunch of amateurs again.

Cameron and his Government have always changed with the wind the only good thing is they have brought the Brexit forward.

report this

Alan S

Mar 22, 2016 at 17:51

About 10 days ago I heard shadow Chancellor John McDonell being interviewed on the Today programme (I think). In answer to "What would you do if Labour was in power and you were Chancellor?" he replied "I would taitor our income to what we were spending".

Good old Labour - got it a*se about face again. Any sensible person tailors their spending to suit there income, and not the other way round.

I allowed myself a hollow laugh when McDonell started to deliver a lecture on how the economy should be managed. Remind me - which party was it that left behind a note at the Treasury saying "There is no money left"?

report this

Alan S

Mar 22, 2016 at 17:58

Line 6 "their" and not "there" before someone else corrects me.

report this


Mar 22, 2016 at 18:49

When he said we don't protect pensioners he should have said pensioners in the private sector. The reason I say this is that people in the private sector who reach state pension age on and after 6 April 2016 will no longer receive cost of living increases via the state pension on part of their occupational pension known as GMP. Potential loss of up to about £20,000. This will not affect the public sector as the Treasury made an announcement on the 1 March 2016

"Government will fully index public service pensions for workers reaching State Pension Age from April 2016 to 5 December 2018"


Also just before the Government announced the that they were going to introduce the single -tier pension they past a law that there would be no further changes to public service schemes for 25 years knowing that employers were going to loose their 3.4% NI rebate. Because of this public service schemes are not allowed to adjust the scheme benefits because of loss of NI rebate or charge their employees more to cover loss of NI rebate.

They past a law saying that non public service schemes can change the level of cover or charge their employers more ..

It seems to be one law for them and another law for the rest of the population.

report this


Mar 22, 2016 at 23:41

The great thing about the Conservatives is that they are able to self-regulate their policies, because if it is not quite right, then things happen to make it right, albeit a resignation or back-benchers revolt and they are prepared to listen (and for the non-believers I'm not on cloud cuckoo land). Lib-dems in the shared cabinet had a similar influence. That unruly red mob on the other side just have no idea!

report this


Mar 23, 2016 at 05:09

" people who have worked hard all their lives, a decent, generous basic state pension..."

What about the UK pensioners living mostly in Commonwealth countries who DON'T GET any of the annual pension increases? They paid their whack: they should get their just dues. Pension rules should apply equally and not discriminate on the basis of where a pensioner lives. (Live in EU, USA - increases paid: Ox, NZ, Canada - NOT paid.)

This issue is ruining the UK reputation for fairness and will continue to embarrass until fixed.

Please sign the petition at:

report this


Mar 23, 2016 at 17:53

The triple lock is a myth, my overall OAP increase is 1.35%, because the increase only applies to basic state pension, and not to any second state pension. In my case it is an additional pension that I acquired through the old SERPS scheme, which has been frozen. Think it is duplicitous of the Chancellor not to give an increase on all of your state pension.

report this


Mar 26, 2016 at 15:42

If you're relying on or have relied on the state pension for the cost of your future self, you're getting or have got, your working life financial planning wrong.

No one works hard all their lives, you spent the first 16-20 years in education, supported by the tax payer, then you work to support yourself, then retire and be supported by the tax payer again.

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

The Citywire Guide to Investment Trusts

In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.

Watch Now

Today's articles

Tools from Citywire Money

From the Forums

+ Start a new discussion

Weekly email from The Lolly

Get simple, easy ways to make more from your money. Just enter your email address below

An error occured while subscribing your email. Please try again later.

Thank you for registering for your weekly newsletter from The Lolly.

Keep an eye out for us in your inbox, and please add to your safe senders list so we don't get junked.

Sorry, this link is not
quite ready yet