The Chancellor of the Exchequer George Osborne has defended the government's changes to tax and benefits by accusing critics of peddling "headline-seeking nonsense" The changes the government has brought in, include cuts to housing benefit for some social housing tenants with a spare room and alterations to council tax, took effect on Monday. Some churches, charities and campaign groups, as well as the Labour Party, have criticised the changes as "unjust". The Chancellor claimed in his speech to a group of supermarket workers in Kent that "nine out of ten working households would be better off".
Mr Osborne said in his speech: "For too long, we've had a system where people who did the right thing - who get up in the morning and work hard - felt penalised for it, while people who did the wrong thing got rewarded for it. That's wrong. So this month we're going to put things right. 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. Now, those who defend the current benefit system are going to complain loudly. These vested interests always complain, with depressingly predictable outrage, about every change to a system which is failing. 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."
Labour's Shadow Chancellor, Ed Balls MP, responding to George Osborne's speech, saying: "George Osborne should be straight with the British people and admit that millions on middle and low incomes are paying the price for his economic failure, while he gives a huge tax cut to millionaires this week. Figures from the independent IFS show that the average family will be £891 worse off this year because of tax and benefit changes since 2010. On top of this incomes are being squeezed further as prices rise faster than wages, yet the Chancellor refuses to rule out cutting or freezing the minimum wage. The benefits bill is rising under this Government because our economy is flatlining, inflation is rising and unemployment is high. The best way to get the benefits bill down is to get our economy growing strongly and get people back to work. Ministers must explain why they will not back Labour's plan for a compulsory jobs guarantee for the long-term unemployed."
This is a battle neither the Coalition parties nor Labour can afford to lose as it could give a clear indicator to which party is likely to win the next general election. Although when Labour figures are asked will they reverse the cuts to benefits the Tory-led Coalition is making they always decline to answer. The Tories are gambling on the public not wanting so much to be on welfare, which is why George Osborne in his speech to the Conservative party conference used the "strivers v shirkers" line to make it sound like he's only going after the unemployed to get them back into work. As cuts to out of work benefits are popular with the public, however when polling is done on cutting things like tax credits for people in work those cuts are far less popular. The Liberal Democrats will claim that raising of the income tax threshold is their policy, which it is, and they're simply keeping a promise made to the British people at the last general election.
