IN a savage attack that will cost workers hundreds of pounds a week, Chancellor Osborne has said he will use Wednesday’s Budget to announce a clamp down on ‘taxpayer-funded subsidies’ for ‘higher earners’ living in social housing.
Also almost one in four civil servants is facing the sack under radical plans to cut the size of the state. Osborne has promised to eliminate the Budget deficit and run a surplus by 2019. This will require £30 billion of savings over the next two years, including £12 billion from the welfare bill, and £13 billion from government departments.
The Chancellor, will use this week’s Budget to signal sweeping spending reductions for Whitehall departments. As part of the efficiency plan, ministers expect 100,000 civil servant jobs, almost a quarter of the 440,000 total, to be lost between now and 2020. This is on top of the 90,000 jobs that have been cut in the past five years.
Those who could face cuts include tax staff working for Revenue & Customs and JobCentre staff, employed by the DWP. Meanwhile, council and housing association tenants in England who earn more than £30,000 – or £40,000 in London – will have to pay up to the market rent for their property, he is due to say.
The move is expected to raise up to £250m a year by 2018-19. It is thought that this could affect 340,000 households. The expected change will build on measures introduced under the coalition government that enabled housing associations and councils to charge market rents to those on incomes of more than £60,000. Extra money from those living in council properties will go straight to the Exchequer.
Writing in The Sun on Sunday, Osborne – who is expected to set out further details of the government’s planned £12bn in welfare cuts – said the Budget would ‘reward work over welfare’ and allow people to keep more of the money they earned.
He wrote: ‘We’ve also decided it’s time to act on the higher earners who use taxpayer-funded subsidies to live in council and housing association homes when they could afford the market rent that others on their salaries pay.’
Claiming ‘fairness’, he added: ‘The welfare system I want to see is one that helps people to get good jobs instead of giving them handouts.’ Interviewed on yesterday’s Andrew Marr Show, Osborne confirmed reports that the benefit cap outside of London will be even lower than previously announced.
He said: ‘We’re going to cut the benefit cap, as we said in our manifesto, to £23,000 in London. But I can tell you today it will be lower in the rest of the country.’ Osborne also said that he would not commit to a reduction in the top rate of income tax after Tory MPs called for the cut.
He signalled he would be looking to make savings from tax credits to help meet the government’s planned £12bn in welfare savings. He said the BBC needed to make ‘savings’, believed to be £350m, as a ‘contribution’ to dealing with the deficit and that it was important for its website not to ‘completely crowd out’ national newspapers.
The Budget will also confirm the end of inheritance tax on family homes worth up to £1m.
Osborne is expected to tell MPs on Wednesday the threshold at which the tax is levied will rise for couples from £650,000 after April 2017.
