George Osborne has signalled a calculated move by the Tories to end “compassionate conservatism”, by announcing further real-terms cuts to benefits for those in work and unemployed.
The chancellor gambled that the public would welcome his candour in discussing the problems facing the UK and its continued budget deficit rather than complain about the negative impact on 3 million households that will be impacts by the two-year freeze on benefits and tax credits.
David Cameron has defended these plans, arguing that the real-terms cuts would be “fair”, as benefits should not rise with inflation if the wages of workers were stagnant, ignoring that many of the low paid poor need tax credits to make ends meet.
As the Tories squeeze the poor, both in work and unemployed, they continue to protect the pensions of the elderly, including those of the wealthy, traditionally a demographic where Tory support is strongest. The state pension will not be frozen, but instead will rise at the rate of inflation, wages or 2.5%, whichever is the greatest. As inflation is currently 1.5%, raising the state pension by 2.5% will mean a real-terms rise in income for all retirees.
