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Summer Budget: which benefits are for the chop

The chancellor spelled out a raft of state benefits he intends to cut in order to save £12 billion by 2019-20.

Summer Budget: which benefits are for the chop

The chancellor spelled out the raft of state benefits he intends to cut in order to save £12 billion by 2019-20.

George Osborne said Britain had to move ‘from a low-wage, high-tax, high-welfare society to a higher-wage, lower-tax, lower-welfare economy.’

He claimed: ‘For Britain is home to 1% of the world’s population; generates 4% of the world’s income; and yet pays out 7% of the world’s welfare spending.’

The chancellor said it was unfair to taxpayers as he announced £9 billion of savings would come from:

  • Freezing working age benefits;
  • Bearing down on housing benefit by forcing down rents in social housing;
  • Streamlining tax credits and universal credit.

The remaining £3 billion would come from a further reduction in the total benefits households can claim, he said. The existing benefits cap of £26,000 will fall to £23,000 in London and £20,000 in the rest of the country.

Among the measures announced by Osborne are a new 'Youth Obligation' for 18-21-year-olds to either 'earn or learn'. This is accompanied by the abolition of housing benefit for the same age group.

As part of the chancellor's theme to make work pay he increased the minimum living wage to £7.20 an hour for workers over 25, and said it would increase rise to £9 by 2020.

Julia Unwin, chief executive of the Joseph Rowntree Foundation, a left of centre think tank, welcomed the increase in the minimum wage which she said fell well below an adequate standard of living. However, she warned that cutting welfare before the jobs market had time to respond was 'a dangerous gamble'.

'The cuts in tax credits and the reduction of the work allowance in universal credit, mean that working families on low incomes will find it even harder to make ends meet. We need a credible long-term plan to make work more secure, build more affordable homes and lower essential bills, or times will simply get tougher for those on low incomes,' she said.

2 comments so far. Why not have your say?


Jul 08, 2015 at 19:25

There was a time when social housing and housing benefit were little more than internal audits.

What's unfair is the way state handouts have been redirected towards private sector profiteering at everyone else's expense.

report this


Jul 09, 2015 at 08:26

Well, Middle England elected the government and think that they will not be affected. They are, of course wrong.

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