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| No plans for more welfare cuts, says George Osborne | |
| (35 minutes later) | |
| George Osborne has repeatedly insisted he has no plans for future cuts to welfare payments, as he faced a hostile grilling over his budget from MPs. | George Osborne has repeatedly insisted he has no plans for future cuts to welfare payments, as he faced a hostile grilling over his budget from MPs. |
| The chancellor was appearing before the Treasury select committee to defend last week’s budget, which began unravelling within days, as cuts to disability benefits were “kicked into the long grass” after a backbench revolt, triggering the resignation of the work and pensions secretary, Iain Duncan Smith. | The chancellor was appearing before the Treasury select committee to defend last week’s budget, which began unravelling within days, as cuts to disability benefits were “kicked into the long grass” after a backbench revolt, triggering the resignation of the work and pensions secretary, Iain Duncan Smith. |
| Rachel Reeves, the former Labour shadow work and pensions secretary, repeatedly asked where the chancellor would find more than £1bn a year to fill the hole in the public finances created by the cancellation of the policy. | Rachel Reeves, the former Labour shadow work and pensions secretary, repeatedly asked where the chancellor would find more than £1bn a year to fill the hole in the public finances created by the cancellation of the policy. |
| The chancellor echoed the promise of Duncan Smith’s successor, Stephen Crabb, saying: “We’re not going to replace the £1bn we’re going to be spending on disability benefits with some other cuts to welfare.” | The chancellor echoed the promise of Duncan Smith’s successor, Stephen Crabb, saying: “We’re not going to replace the £1bn we’re going to be spending on disability benefits with some other cuts to welfare.” |
| When Reeves pointed to the fact that current forecasts showed the Treasury busting its “welfare cap” on social security spending by £20bn over the course of this parliament, and asked whether it was possible he could announce new welfare cuts at the autumn statement in order to meet it, the chancellor repeatedly used the formula that the Treasury has “no plans” for fresh reductions. | When Reeves pointed to the fact that current forecasts showed the Treasury busting its “welfare cap” on social security spending by £20bn over the course of this parliament, and asked whether it was possible he could announce new welfare cuts at the autumn statement in order to meet it, the chancellor repeatedly used the formula that the Treasury has “no plans” for fresh reductions. |
| Asked whether the welfare cap was still government policy, he said “controlling welfare spending is necessary for the economy”. | Asked whether the welfare cap was still government policy, he said “controlling welfare spending is necessary for the economy”. |
| He also hit back against Duncan Smith’s claim, when interviewed on the BBC’s Andrew Marr Show on Sunday, that the cuts emerged from Treasury demands for savings and had always been envisaged as part of the budget. | He also hit back against Duncan Smith’s claim, when interviewed on the BBC’s Andrew Marr Show on Sunday, that the cuts emerged from Treasury demands for savings and had always been envisaged as part of the budget. |
| “The proposals on personal independence payments advanced by the DWP were the response to a review that they had carried out,” he said. | “The proposals on personal independence payments advanced by the DWP were the response to a review that they had carried out,” he said. |
| The chancellor refused to say whether Duncan Smith had questioned the plans during earlier discussions, but said “in the end, you reach a collective decision”. He added that there was “alway likely to be a difficult relationship” between the chancellor and the minister in the biggest spending department. | The chancellor refused to say whether Duncan Smith had questioned the plans during earlier discussions, but said “in the end, you reach a collective decision”. He added that there was “alway likely to be a difficult relationship” between the chancellor and the minister in the biggest spending department. |
| Osborne also faced tough questioning over the way he interpreted his tax and spending rules. Andrew Tyrie, the committee’s Conservative chairman, urged him to “spare the government a great deal of political grief” in future by taking a longer-term approach. | Osborne also faced tough questioning over the way he interpreted his tax and spending rules. Andrew Tyrie, the committee’s Conservative chairman, urged him to “spare the government a great deal of political grief” in future by taking a longer-term approach. |
| The chancellor defended his decision to announce new spending cuts in the budget, including £3.5bn from Whitehall departments, to ensure the rule could still be met despite deteriorating economic forecasts. | The chancellor defended his decision to announce new spending cuts in the budget, including £3.5bn from Whitehall departments, to ensure the rule could still be met despite deteriorating economic forecasts. |
| “I think it is best to get ahead of the curve,” he said. “I thought it was sensible to act on that now, albeit with decisions that take effect several years down the track.” | “I think it is best to get ahead of the curve,” he said. “I thought it was sensible to act on that now, albeit with decisions that take effect several years down the track.” |
| But Tyrie warned him that adjusting his spending plans twice a year – at autumn statements and budgets – in response to changes in economic forecasts, had created unnecessary instability. | But Tyrie warned him that adjusting his spending plans twice a year – at autumn statements and budgets – in response to changes in economic forecasts, had created unnecessary instability. |
| He urged Osborne to reflect on the way the rules were assessed, which at present force him to pencil in spending cuts or tax rises in several years’ time, to show that he can deliver a surplus on the public finances. | He urged Osborne to reflect on the way the rules were assessed, which at present force him to pencil in spending cuts or tax rises in several years’ time, to show that he can deliver a surplus on the public finances. |
| “It’s not as if this is something that can’t be changed,” Tyrie said. | “It’s not as if this is something that can’t be changed,” Tyrie said. |
| However, Osborne insisted it was the right approach to aim to put the public finances back in the black. “When are you going to run a surplus in this country, if after seven or eight years of economic growth you are not running a surplus?” He also rejected the argument of Labour MP Wes Streeting that the target is only met because of “accounting wheezes and window dressing”. | However, Osborne insisted it was the right approach to aim to put the public finances back in the black. “When are you going to run a surplus in this country, if after seven or eight years of economic growth you are not running a surplus?” He also rejected the argument of Labour MP Wes Streeting that the target is only met because of “accounting wheezes and window dressing”. |
| Both the Office for Budget Responsibility and the Institute for Fiscal Studies thinktank have suggested the chancellor has shuffled spending cuts and tax revenues between one year and another in order to balance the books. | Both the Office for Budget Responsibility and the Institute for Fiscal Studies thinktank have suggested the chancellor has shuffled spending cuts and tax revenues between one year and another in order to balance the books. |