David Cameron: Labour is the party of 'unlimited welfare'

Prime Minister hit back after the Labour leader accused ministers of drawing up tax policies designed to benefit wealthy supporters

David Cameron has denounced Labour as the party of “unlimited welfare” in acrimonious clashes with Ed Miliband at Prime Minister’s Question Time.

He hit back after the Labour leader accused ministers of drawing up tax policies designed to benefit wealthy supporters who are “on their Christmas card list”.

Mr Cameron described the shadow Chancellor, Ed Balls, who was barracking him, as a bully and added: “He can dish it out but he can’t take it.”

Mr Miliband retaliated with a reference to the exclusive Oxford University drinking club that the Prime Minister belonged to as a student. The Labour leader said: “I’ve heard everything when the boy from the Bullingdon Club lectures people on bullying. Have you wrecked a restaurant recently?”

Their exchanges were dominated by George Osborne’s announcement in last week’s Autumn Statement that increases to most working-age benefits will be limited to one per cent – effectively as cut as inflation is currently more than double that rate.

Mr Miliband said the Chancellor was trying to play “divide and rule” by portraying those on benefits as “scroungers”.

He said: “[Mr Osborne] said it was the shirkers, the people with the curtains drawn, who would be affected.”

Mr Cameron hit back: “Welfare needs to be controlled. Everyone who is on tax credits will be affected by these changes because we have to get on top of the welfare bill.

“That is why we are restricting the increase on out-of-work benefits and it is also the reason why we are restricting in-work benefits.”

But he said the increase in the personal income tax allowance showed “we believe in cutting people’s taxes when they are in work”.

Mr Miliband said the benefits rise would hit more people in work than without a job.

“Despite the impression given by the Chancellor of the Exchequer, over 60 per cent of those affected are in work.

“It’s the factory worker on the night shift, it’s the carer who looks after elderly people around the clock and it’s the cleaner who cleans the Chancellor’s office while his curtains are still drawn and he’s still in bed.

“The Chancellor calls them scroungers, what does the Prime Minister call them?”

Mr Cameron said a person working full-time on the minimum wage would see their income tax bill halved under the coalition Government.

“We are saying to working people you can earn another £3,000 before you even start paying income tax,” he said. “This is the party for people who work, his is the party of unlimited welfare.”