Osborne to defend Budget ahead of vote

March 22, 2016 7:18 am Published by

George Osborne to defend Budget ahead of Common vote

George Osborne with his budget box

Chancellor George Osborne is to defend his handling of the economy ahead of a Commons vote to approve his Budget.

He will confirm he has dropped planned cuts to disability benefits – and praise Iain Duncan Smith, who resigned as work and pensions secretary over what he called “indefensible” changes.

The chancellor is under pressure to explain how he will cover the £4.4bn gap in the Budget left by the rethink.

Labour said Mr Osborne should resign and the Budget should be withdrawn.

Reforms to the Personal Independence Payment (PIP) had been due to save a total of £4.4bn from the welfare budget by 2020 as part of Mr Osborne’s commitment to reducing benefits spending by £12bn a year.

But critics said the changes could have affected up to 640,000 people, making them as much as £100 a week worse off.

The chancellor is expected to say the Budget he set out on 16 March was that of a “compassionate, one-nation Conservative government determined to deliver both social justice and economic security”.

He will say it delivered on the Conservative manifesto commitment to “economic security, controlling public spending and lower taxes for working people and business”.

“We know that those who suffer most when Britain loses control of its public finances and the economy crashes aren’t the best off but the poorest and the most vulnerable,” he will say.

After listening to concerns, he will not proceed with changes to PIPs, he will say.

“But this Budget will lift 1.3 million of the lowest paid out of income tax, it will deliver improvements to our schools, help the least well-off to save, and support business and enterprise to create jobs and boost social mobility.”

Mr Duncan Smith resigned on Friday over the cuts to disability payments, which came at the same time as tax cuts for higher earners.

He said this flew in the face of the prime minister’s and Mr Osborne’s oft-repeated claim that “we are all in this together”.

Mr Osborne is expected to tell the Commons he is sorry Mr Duncan Smith chose to leave the government, and that he wants “to recognise his achievements in helping to make sure work pays, breaking the old cycles of welfare dependency and ensuring the most vulnerable in our society are protected”.

Cameron defence

In his first act as Mr Duncan Smith’s replacement as work and pensions secretary, Stephen Crabb confirmed they had been dropped and that there would be no further raid on welfare spending to plug the gap.

The chancellor is not expected to bring forward alternative measures to meet the shortfall until the Autumn Statement at the end of the year.

Media captionStephen Crabb: No further plans for welfare cuts

Labour leader Jeremy Corbyn said the decision to abandon the planned cuts had left an enormous hole in the Budget, while shadow chancellor John McDonnell called on Mr Osborne to resign.

He added that his absence from the Commons chamber on Monday “insults this House” and that Treasury minister David Gauke had been left to “defend the indefensible”.

He added: “This is no way to deliver a Budget and no way to manage an economy.”

But Prime Minister David Cameron defended his chancellor and said the Conservatives remained a “modern, compassionate, one-nation” party under his leadership.

Mr Cameron listed policies aimed at low-earners including the National Living Wage and rebuilding “sink estates”, adding: “None of this would be possible if it wasn’t for the actions of this government and the work of the chancellor in turning our economy around.”

As well as the welfare changes, Downing Street said ministers would also not seek to oppose amendments to scrap the so-called “tampon tax” and an increase in VAT on solar panels.

What are Personal Independence Payments?

  • They are gradually replacing Disability Living Allowance and help to cover the additional costs that disabled people face
  • One element covers living – paying for aids and appliances like prostheses and adapted utensils – and the other covers mobility, for example, helping to fund customised cars
  • Recipients are regularly reassessed and money awarded on a points basis
  • The proposed changes would have reduced the weight given to the use of aids and appliances in two of the 10 daily living activities – dressing and managing toilet needs
  • Disability charities say just a single point’s difference could have meant some people would lose the benefit altogether or receive less
  • But the government said “a significant number of people are likely to be getting the benefit despite having minimal to no ongoing daily living extra costs”

Who would the PIP changes have affected?

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This post was written by FSB News