CHANCELLOR Osborne launched his vicious class war budget yesterday, signalling massive Tory attacks on the working class, with the young and the poor his main target.
Tax credits are to be withdrawn from the neediest households, while housing benefit for under-21s is to be abolished and five million youth are to be forced onto cheap labour ‘apprenticeships’. Benefits are to be frozen for four years, including tax credits and local housing allowance, while maintenance grants for students with family incomes below £42,000 are to be scrapped and converted into loans.
While announcing a multi-billion pound ‘benefit’ hike for the wealthy, with another 2% cut in Corporation Tax to 18%, Osborne declared that public sector pay rises will be limited to 1% a year for the next four years, while the £26,000 benefit cap for unemployed households is to be cut to £23,000 in London and £20,000 in the rest of the country.
A minimum wage of £9 an hour by 2020 is no compensation! Council and housing association tenants who earn more than £30,000, or £40,000 in London, will have to pay the ‘market rent’ in future, while single mothers are to be forced to work. ‘Welfare spending is not sustainable,’ Osborne began. ‘We’ve already legislated for savings of over £21 billion in the last parliament, capped benefits for out-of-work families and started to introduce Universal Credit … but to live within our means as a country … we need to find at least a further £12 billion of welfare savings.
‘Those who can work will be expected to look for work and take it when it is offered … for those aged 18-21 we are introducing a new youth obligation that says they must either earn or learn. We are also abolishing the automatic entitlement to housing benefit for 18-21-year-olds …
‘We now expect parents with their youngest child aged three, including lone parents, to look for work if they want to claim Universal Credit … we will legislate to freeze working age benefits for four years. That will include tax credits and local housing allowance …
‘From next year we will reduce the level of earnings at which a household’s tax credits and universal credits start to be withdrawn. The income threshold in tax credits will be reduced from £6,420 to £3,850. Universal Credit work allowance will be similarly reduced and they will no longer be awarded to non-disabled claimants without children.
‘The rate at which a household’s tax credit award is reduced as they earn more will be increased by raising the taper rate to 48%. The income rise disregard will be reduced from £5,000 to £2,500, that is the same level at which it was originally set in 2003. Taken all together, the freeze in working age benefits, downrating of social rents and the focus of tax credits and universal credit on the lowest income households will reduce the welfare bill by £9 billion a year by 2019-20 …
‘We’ve already introduced a cap on the total amount of benefits any out-of-work family can receive at £26,000 … We will now go further and reduce the benefits cap to £23,000 in London and to £20,000 in the rest of the country. We are also going to require those on higher incomes living in social housing to pay rents at the market rate. . . And we will turn support for mortgage interest payments from a benefit to a loan.
‘Another decision that most families make is how many children they have, conscious that each extra child costs the family more. In the current tax credit system, each extra child brings in an additional payment of £2,780 a year … In future we will limit the support provided through tax credits and universal credit to two children.’
