Find out what Britain is thinking
George Osborne has welcomed the new year with a stark warning that another £25bn of cuts are needed after the next general election.
The welfare budget looks set to bear the brunt of the proposed round of further cuts, with an expected £12bn to be slashed from benefits.
At a speech in the Midlands on Monday, the Chancellor said: “Britain is on the rise, the economy is doing better. I just want to make sure we don’t squander what we’ve achieved and go back to square one.”
Osborne said that benefits for the young and people in work will be considered ahead of any moves to cut pensioner benefits.
First to condemn the proposals was Liberal Democrat leader Nick Clegg, who raged at the “remorseless” scale of the planned cuts.
Speaking at Whitehall, Clegg said the Conservative Party was making a “monumental mistake”.
He said: “You’ve got a Conservative Party now who are driven, it seems to me, by two very clear ideological impulses. One is to remorselessly pare back the state, for ideological reasons just cut back the state.
“Secondly, and I think they are making a monumental mistake in doing so, they say the only people in society, the only section in society, which will bear the burden of further fiscal consolidation are the working-age poor.”
But John Cridland, director-general of the Confederation of British Industry (CBI), the UK’s leading business lobbying organisation, backed Osborne’s message.
He said: “We’ve long backed the dual approach of tackling the deficit and boosting growth and it is beginning to reap some positive results, but there is still much more to do.
“As the Chancellor highlights, only by helping businesses to grow will we be able to pay down our national debt while creating jobs and raising living standards.”
But professor Philip Booth, editorial director at the Institute of Economic Affairs, described Osborne’s plans as “reckless and inconsistent”.
He said: “It will prove impossible for the government to deliver the necessary spending cuts whilst maintaining its commitment to ring-fencing. David Cameron’s promise to increase pensions in real terms, more or less no matter what economic conditions prevail, is irresponsible and completely at odds with the Chancellor’s rhetoric.
“Areas such as health, schools, foreign aid, HS2, pensions and other benefits for older people should all be considered as areas in which savings can be made.
“In the context of the long-term fiscal position, the government’s promises are both reckless and inconsistent even with George Osborne’s limited ambitions to cut spending.”
Shadow Chancellor Ed Balls pointed out the government’s failure to balance the books by 2015. Osborne is now looking for the government to run a budget surplus by 2019.
Balls said: “George Osborne is desperate to stop talking about the cost-of-living crisis on his watch. But that won’t stop working people from doing so as they are on average £1,600 a year worse-off under the Tories and prices are still rising faster than wages.
“Nor will the Chancellor admit the reason why he is being forced to make more cuts is because his failure on growth and living standards has led to his failure to balance the books by 2015.”
Of course, the virtual denizens of Twitter also had plenty to say on the proposed cuts:
.@George_Osborne is right – sticking to our long-term economic plan really matters for all our futures. Here’s why: http://t.co/Y6wjP5MvdF
— David Cameron (@David_Cameron) January 6, 2014
LOL tax avoidance has increased by 1 BILLION. And this Gov says they are serious about clamping down on tax avoidance. #jokers
— UK Uncut (@UKuncut) December 19, 2013
Osborne: “we must find another £12bn in welfare cuts as there are still some poor people who can afford to eat”
— David Schneider (@davidschneider) January 6, 2014
Osborne again distinguishes between “people who work and pay taxes” and people receiving welfare, when many millions on both at same time
— Faisal Islam (@faisalislam) January 6, 2014
When listening to Osborne’s speech, do bear in mind David Cameron’s “the good news is going to keep coming” 15 months ago.
— Alex Andreou (@sturdyAlex) January 6, 2014
The politics of @George_Osborneannouncement = Tory desire to get back to talking about deficit & cuts not Labour cost of living agenda
— Nick Robinson (@bbcnickrobinson) January 6, 2014
So what do you think of the plans? Let us know in comments below and @LondonlovesBiz and @Harry_Cockburn
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