Chancellor George Osborne has said that a further £25 billion of cuts would be needed after the next election, with young people a particular focus of the suggested welfare savings.
Osborne told an audience in Birmingham that a further £12 billion would need to be cut from the welfare budget, and suggested cutting housing benefit for the under-25s, and restricting council housing for those earning over £65,000 per year.
Osborne has stated that he aims to have the government running a surplus by 2018-19, and to get there the UK would face a further £60 billion in cuts over the next four years.
The chancellor told Sertec employees that whilst the economy was improving and the country is on the right track, the job is “not even half done” and 2014 will be a year of “hard truths”. He has not completely ruled out tax changes to raise funds, but plans no tax rises to meet his targets over the next five years.
Whilst the Chancellor’s plans propose making cuts that would affect young people and those currently in work, Osborne told the BBC Radio 4’s Today programme that the government would not be targeting the universal benefits given to all pensioners, rich and poor, such as the winter fuel allowance and free BBC license fees as they would only save “tens of millions” of pounds.
On Sunday Prime Minister David Cameron promised that the state pension would rise by the rate of inflation or 2.5%, whichever is higher.
In response to Osborne’s speech, Labour’s shadow chancellor Ed 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 £1600 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.”
