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‘Fair’ welfare changes will make work pay, says Osborne

By Richard Johnstone | 2 April 2013

Chancellor George Osborne today insisted that the welfare reforms taking effect this month were fair and would ‘make work pay’.

Chancellor George Osborne today insisted that the welfare reforms taking effect this month were fair and would ‘make work pay’.
Photo: PA

In a speech at a Morrisons supermarket depot in Kent, Osborne said the coalition had to take difficult decisions to cut the deficit, adding that the current benefits system was ‘broken’.

The changes include the controversial ‘bedroom tax’, a Housing Benefit cut for tenants with an extra bedroom. In addition, working age benefits and tax credits have been uprated by just 1%, a below-inflation increase, and new Council Tax Benefit schemes are being introduced as the funding is localised to councils. Also, an overall cap on benefits is to be introduced in stages from later this month, set at £26,000 a year.

Osborne said the current welfare system left hard-working people feeling penalised, while people who ‘did the wrong thing got rewarded for it’.

The changes would ‘put things right’, he added. Those who defended the current system represented ‘vested interests’ who complained ‘about every change to a system which is failing’.

He added: ‘I want to take the argument to them. Because defending every line item of welfare spending isn't credible in the current economic environment. Because defending benefits that trap people in poverty and penalise work is defending the indefensible.

‘The benefit system is broken; it penalises those who try to do the right thing; and the British people badly want it fixed.’

These changes would create a benefit system so the country could live within its means, he said. ‘I’m proud of what we’re doing to restore some common sense and control on costs.

‘Our reforms are returning welfare to its most fundamental principles – always helping the most vulnerable, but giving people ladders out of poverty. And the politicians who should have to explain themselves are those who have given up on trying to get people working again.’

He added that many people would benefit from the government’s policy to increase the personal allowance to £9,440 in the 2013/14 financial year. ‘This month, around nine out of ten working households will be better off as a result of the changes we are making. This month, we will make work pay.’

Ahead of the speech, Labour called on all councils in England to take a stand against the bedroom tax and pass motions denouncing the reductions.

Shadow local government secretary Hilary Benn said councillors should ‘look at the damage the bedroom tax will cause’. He urged them to ‘stand up against this unfair policy which has not been properly thought-out’.

Benn added: ‘It's hard to imagine that Conservative and Liberal Democrat councillors would want to stand silently by as hundreds of thousands of their own constituents, two-thirds of them disabled, are hit by the bedroom tax imposed by their leaders in Westminster.’

Pilots of the government’s Universal Credit welfare reforms were also due to be launched later this month, but only one of the four projects will begin as scheduled.

The Department for Work and Pensions had intended to launch four trials in councils in the Manchester and Cheshire areas of England this month. However, only one ­– in Ashton-under-Lyne – will now be operational by the end of April.

The others, in Oldham, Warrington and Wigan, will begin in July, the department said in a statement on March 28.

This controlled approach will mean that Jobcentres intensively test the new system as it rolls out – ensuring that claimants are protected throughout,’ the DWP stated.

It is intended that new benefit claimants across Britain will begin to receive the Universal Credit, which will merge six existing payments into one, from October.

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