TORY Chancellor Osborne’s class war Budget yesterday had at its centre a Welfare Spending Cap of £119.5bn for 2015-16.
The limit on total welfare spending will be set by the chancellor at the beginning of each parliament and if the limit is breached the chancellor will have to explain why and a vote would be held in Parliament.
‘Never again should we allow its (welfare spending) costs to spiral out of control,’ said Osborne.
Pension credits, severe disablement allowance, incapacity benefits, child benefit, maternity and paternity pay and universal credit will all be within the scope of the cap.
The cap will also include spending on the Employment and Support allowance.
‘In future, any government that wants to spend more on benefits will have to be honest with the public about the costs, need the approval of Parliament, and will be held to account by this permanent cap on welfare,’ Osborne added.
Osborne said the higher rate income tax threshold will rise from £41,450 to £41,865 next month, and then by a further 1% to £42,285 next year and announced tax breaks for business which, he claimed, would to boost productivity, exports and manufacturing.
He claimed that Britain was growing at a faster rate than any other advanced economy – revising growth forecasts up to 2.7% in 2014 – but he warned the job of recovery was ‘far from done’.
He said to those with money: ‘The message from this Budget is: you have earned it, you have saved it, and this government is on your side.’
He continued: ‘With the help of the British people we’re turning our country around. We’re building a resilient economy. This is a Budget for the makers, the doers, and the savers.’
At the end of his 55 minute-long Budget speech, Osborne announced that pensioners with a ‘pension pot’ will have the freedom to cash in as much of it as they want, removing the need to buy an annuity.
Osborne also outlined a new Pensioner Bond for all people over 65, with interest rates of 2.8% for one-year bonds and 4% for three-year bonds. He said the changes were ‘the most far-reaching reform to the taxation of pensions since the regime was introduced in 1921’.
Labour leader Miliband responded that most people’s standard of living was falling ‘sharply’ under the coalition government.
He said: ‘Whose recovery is it under the Tories? Under them it is a recovery for the few not the many. We know what their long term plan is, tax cuts for the richest whilst everyone else gets squeezed.’
Miliband said families had become £1,600 a year worse off under the coalition.
Miliband said: ‘Living standards are falling for 44 out of 45 months under this prime minister. . . This is Cameron’s Britain 2014. 350,000 people going to food banks, 400,000 disabled people paying the Bedroom Tax, one million more people paying 40p tax, 4.6 million families facing cuts to Tax Credits. . .
‘No mention in the Budget Speech of the millionaire’s tax cuts . . . If you’re a City banker, earning five million pounds and you’re feeling the squeeze, don’t worry because they feel your pain.
‘Because this year, that City banker was given a tax cut not just any tax cut, but £664 a day, £20,000 a month, a tax cut worth more than £200,000 a year.
‘So the prime minister affords a tax cut for that banker of more than £200,000 a year, but he can’t afford a pay rise of £250 a year for a nurse.
‘And these are the people who have the nerve to tell us we’re all in this together . . . Rents have risen twice as fast as wages. . . Bankers’ pay in London has risen five times faster than the pay of the average worker . . .
‘They don’t want to talk about the low paid workers, promised a £7 minimum wage by the chancellor and given just 19p an hour. Under this government it’s an economy of the privileged, by the privileged, for the privileged. . .
‘They tell people their wages are rising when they are falling, just like they tell people that energy bills are falling when they are rising.
‘His global race is a race to the bottom, people forced to do two or even three jobs to make ends meet, not knowing how many hours they are going to get from one week to the next and no idea what the future holds for their kids.’
