Nick Clegg blasts George Osborne's 'monumental mistake' as Chancellor plans to slash welfare spending by a FURTHER £12billion

George Osborne today turned the screw on the poor and disabled as he set out plans to slash welfare spending by a further £12billion.

The Chancellor signalled the next Tory government would strip housing benefit from the under 25s and stop people earning £60,000 or more from living in council houses.

The plans were branded a “monumental mistake” by Nick Clegg who accused the Conservatives of penalising the “working poor”.

Mr Osborne said a further £25billion of additional spending cuts were needed in the two years after the 2015 general election to bring about a “permanently smaller” state.

“We’ve got to make more cuts: £17 billion this coming year, £20 billion next year. And over £25 billion further across the two years after. That’s more than £60 billion in total,” he said.

And he warned the bulk of the savings would have to come from an extra £12billion in benefit cuts.

With the Government pledging to protect pensions this will mean taking housing benefit from hundreds of thousands of young people and hitting council house tenants.

In a speech in the West Midlands, Mr Osborne said there would be no let up on his austerity measures despite the improving economy.

He said 2014 would be the year of “hard truths” for the country. This included accepting that Britain could never return to the spending levels of the last Labour government.

“We’d either have to return borrowing to the dangerous levels that threatened our stability, or we’d have to raise taxes so much we’d put our country out of business.

“Government is going to have to be permanently smaller – and so too is the welfare system,” he said.

This would involve £12billion of further welfare cuts from 2015 to 2017.

“That’s how to reduce the deficit without even faster cuts to government departments, or big tax rises on people,” he said.

But even his own independent adviser admitted the cuts would hit the poor, the sick or families with children.

Paul Johnson, the director of the Institute for Fiscal Studies economic think tank, said: “Wherever you look, you are taking money either from people who are poor or from people who are sick and disabled or from people who are sick and disabled or from people with children, none of which look terribly easy to achieve.”

Robert Chote, the head of the Treasury’s economic forecaster the Office for Budget Responsibility, said Mr Johnson was right to say the sick and disabled would suffer if there were further welfare cuts.

Cutting housing benefit to the under 25s would save around £1.8billion and would still leave the Chancellor having to find another £10billion of cuts from other parts of the welfare bill.

Campaigners also warned that of the 383,650 under 25s who get housing benefit, 171,690 (45%) were single parents.

The Treasury was unable to say how many council house tenants earned £60,000 or more or what mechanism would be used to evict them.

Even if Mr Osborne finds £12billion of welfare savings, he will still have to find £13billion from other departments, hitting the transport, police and defence budgets.

Mr Clegg rushed to distance himself from the plans and accused the Tories of “remorselessly” tearing back the state and imposing “cuts for cuts’ sake.”

“I think they are making a monumental mistake in doing so - they’ve said that the only people in society, the only sector of society which will bear the burden of further fiscal consolidation, are the working-age poor, those dependent on welfare,” the Deputy PM said.

He said the Tories should look at reversing their marriage tax allowance and inheritance tax break before looking at cutting welfare further.

Shadow Chancellor Ed Balls said the main reason Mr Osborne was having to make more cuts was because of his failure to balance the books by 2015.

“This failure means Labour will have to make cuts and in 2015/16 there will be no more borrowing for day-to-day spending. But we will get the deficit down in a fair way, not give tax cuts to millionaires. And we know that the way to mitigate the scale of the cuts needed is to earn and grow our way to higher living standards for all,” he said.

The children’s charity Barnardo’s said removing housing benefit from the under 25s would leaving some of the country’s most vulnerable people “stranded.”

“We must not forget that many disadvantaged young people starting out in the world simply do not have a family that they can turn to for help,” the charity said.

Unison General Secretary Dave Prentis said the Government’s policies were pushing people to the “brink of despair.”

“The Tories certainly know how to kick people when they are down. Chancellor Osborne and the rest of this Tory/LibDem Government are just like a broken record. Their one stated aim is to pay down the deficit. Their one policy is to cut public spending and in the process hit the weak, the sick and the vulnerable,” he said.

TUC General Secretary Frances O’Grady added: “Voters may have endured the cuts as nasty medicine during recent years of recession and stagnation but they expect to benefit now that the economy is recovering.

“Polling shows that people do not share the Chancellor’s vision of permanently shrinking the state, with most wanting the services that have been cut to be restored as growth returns. Fewer than three in ten people want cuts retained.

“Public spending cuts of the magnitude proposed by George Osborne would cause real pain to hard-working people. Such cuts could not be achieved without getting rid of the vital safety net that people need if they have a baby, lose their job, or have an accident at work. Three-quarters of the welfare cuts already announced have fallen on working people, and further cuts will simply prolong the living standards crisis.”

The Department for Local Government and Communities said the penalty would apply to the estimated 11,000 to 21,000 council house tenants whose household income is more than £60,000 a year.

Under the plans they would not be evicted but asked to pay more in rent to reflect their income.

“We intend to give landlords the option to charge very high-earning social tenants a fair level of rent - so if the tenants want to continue using this precious national resource, they will pay for the privilege,” said Housing Minister Kris Hopkins.



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Osborne can dream on because the Tories won't be in after May 2015, then it will be time for the rich to pay their fair share in tax, and also Labour will bring in the mansion tax...Time to hammer the rich for a change!