Conservatives could cut another £12bn from welfare budget

George Osborne's tough message on post-2015 savings is another example of how the two coalition parties are diverging ahead of the election

A Conservative government could cut another £12bn off the welfare budget, George Osborne has suggested as he insisted that further savings on benefits would be needed to clear the deficit.

The Chancellor drew a clear and deliberate dividing line with Labour and the Liberal Democrats as he mapped out his strategy for the period beyond the 2015 general election. Mr Osborne insisted that whoever is in power will have to impose significant reductions to welfare. Although the other two main parties are likely to accept limited cuts in this area, they would  not be on the scale contemplated by the Tories.

Mr Osborne told the Commons Treasury Select Committee: “My view is welfare expenditure cannot be excluded from difficult decisions that need to be made. If you want to maintain the same pace of reduction in government spending that we have had over this parliament, rather than accelerating it, then you are going to have to find billions of pounds of welfare savings.  I think that is what this country needs to do. Personally I think if it comes to a choice we should be making our investment in schools and in science, because that's securing the long-term economic health of this country and we shouldn't be cutting those things because we are not prepared to deal with the welfare budget.” He also promised to prioritise the health budget.

The Chancellor was challenged over a calculation by the independent Institute for Fiscal Studies that £12bn of welfare savings would be needed to protect services. He replied: “I don't want to put a number on it, but I agree with the analysis behind that number, that many billions of pounds of welfare savings are going to be required if we want to avoid cutting government budgets any further than they have been.” He added: “Anyone who wants to be honest with the British public about dealing with the deficit and making sure we retain public services of sufficient quality should also be honest about the welfare savings that are required.”

Mr Osborne also hinted that he might be prepared to bow to pressure from some Tory MPs to lower the £26,000-a-year cap on benefit claims by one family. He admitted that any change to it  would be the subject of “fierce debate” inside the Coalition. Later senior Lib Dems confirmed the Nick Clegg would not sanction a lower cap before the election, saying that would be “premature” because the ceiling had only taken effect this year.

Mr Clegg backed a controversial rise of only 1 per cent in many benefits for three years but has ruled out further welfare cuts before the election on the grounds that the Tories will not curb perks such as winter fuel allowances and free bus travel and TV licences for better off pensioners.

Mr Osborne's tough message on post-2015 welfare savings is another example of how the two coalition parties are diverging ahead of the election. It threatens to provoke a clash with Danny Alexander, his Lib Dem deputy at the Treasury, with whom he enjoys a close working relationship. The Chief Treasury Secretary, writing on The Independent's website this week, warned that “some Conservatives are ideologically wedded to continuous cuts as the route to a smaller state” and insisted the Lib Dems did not support that.

Tory strategists believe that further welfare cuts are a potential vote winner in 2015.  Tory ministers have toned down their earlier rhetoric suggesting that benefit claimants are “scroungers” rather than “strivers” amid fears of a backlash, especially in the North. But they insist that many voters will support more “carrot and stick” welfare reforms to encourage jobless people to work and help to “finish the job” of eliminating the deficit by 2019. “It plays very well in marginal seats,” said one Tory aide.

Mr Osborne, who announced that next year's Budget will be held on March 19, was asked whether he agreed with the Office of Budget Responsibility's analysis that it was “inconceivable” that household incomes had not been falling since the financial crisis. He replied: “I agree that what happened in 2008 has made this country a lot poorer. I accept that. What I would say is that the way to make the country richer is to stick with the economic plan that has helped us recover from that economic calamity.”

Suggested Topics
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: Management Accountant - North West London, £35-40k

£35000 - £40000 per annum: Ashdown Group: Management Accountant (ACCA / CIMA, ...

Recruitment Genius: Female Care Team

£11 - £12 per hour: Recruitment Genius: A 10 year old girl who has profound an...

Ashdown Group: Marketing Manager - Manchester - Urgent Requirement!

£30000 - £35000 per annum + 20 days holidays & pension: Ashdown Group: Marketi...

Recruitment Genius: Business Development Manager

£35000 - £45000 per annum: Recruitment Genius: A Business Development Manager ...

Day In a Page

Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness
Homeless Veterans appeal: Homeless in Wales can find inspiration from Daniel’s story

Homeless Veterans appeal

Homeless in Wales can find inspiration from Daniel’s story
Front National family feud? Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks

Front National family feud?

Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks
Pot of gold: tasting the world’s most expensive tea

Pot of gold

Tasting the world’s most expensive tea
10 best wildlife-watching experiences: From hen harriers to porpoises

From hen harriers to porpoises: 10 best wildlife-watching experiences

While many of Britain's birds have flown south for the winter, it's still a great time to get outside for a spot of twitching
Nick Easter: 'I don’t want just to hold tackle bags, I want to be out there'

'I don’t want just to hold tackle bags, I want to be out there'

Nick Easter targeting World Cup place after England recall
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore