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George Osborne: £12bn in welfare savings have been found | |
(about 4 hours later) | |
Chancellor George Osborne says he has identified how the government will make the £12bn of welfare cuts promised in the Conservative election manifesto. | |
He will announce the bulk of the savings in his Budget on Wednesday, the BBC understands. | |
Those known so far include a reduction in the benefit cap and removing subsidies for social housing. | |
Mr Osborne is also expected to announce that the BBC will have to pay for TV licences for over-75s. | |
'Higher earners' | |
Mr Osborne said the welfare cuts were needed to prevent even deeper cuts to public services and to fulfil the government's aim of eliminating the deficit and running a surplus. | |
"So yes, we've got to find savings in welfare - and we have found that £12bn of savings in welfare that we said we'd be able to find in the election," he said. | |
The headline Budget announcement over the weekend was a clampdown on "taxpayer-funded subsidies" for "higher earners" living in social housing in England. | |
But Mr Osborne also announced: | |
Mr Osborne confirmed he would be seeking to make cuts to tax credits for people on low incomes, which had become a "very expensive" system, costing £30bn. | |
'Austerity cult' | |
He said the low paid would be compensated by tax cuts in an effort to end the "merry-go-round on which people pay their taxes and then get back benefits" and firms would be encouraged to pay higher wages. | |
Shadow chancellor Chris Leslie said Labour backed the benefits cap but Mr Osborne should introduce tax breaks for employers that pay the "living wage", which is £9.15 an hour in London and £7.85 elsewhere, as a way of boosting people's incomes. | |
He told Andrew Marr: "If we can finally persuade George Osborne to U-turn and back some incentives for a living wage, that I think would be very welcome. | |
"But don't underestimate how important some of these tax credits have been, not just helping people be able to afford to be able to go to work - all those travel costs, childcare costs and so forth - but also there's an important principle about helping the very most vulnerable in society." | |
Meanwhile, Mr Leslie suggested that Labour could back the chancellor's move to make the BBC pick up the £650m bill for free television licences for the over-75s, but wanted to see the full details before deciding. | |
The SNP said Mr Osborne's Budget would be a "sermon from an austerity cult - cutting where it is not necessary and weakening further the chance of a sustained recovery". | |
Housing subsidies | |
Under the planned changes to housing subsidies, local authority and housing association tenants in England who earn more than £30,000 - or £40,000 in London - will have to pay up to the market rent, Mr Osborne will say. | |
The move is expected to raise up to £250m a year by 2018-19. | The move is expected to raise up to £250m a year by 2018-19. |
It is thought that this could affect 340,000 households. | It is thought that this could affect 340,000 households. |
The change - which will cost tenants on average up to £70 extra a week - will build on measures introduced under the coalition government that enabled housing associations and local authorities to charge market rents to those on incomes of more than £60,000. | The change - which will cost tenants on average up to £70 extra a week - will build on measures introduced under the coalition government that enabled housing associations and local authorities to charge market rents to those on incomes of more than £60,000. |
Extra money from those living in local authority properties will go straight to the Exchequer. | Extra money from those living in local authority properties will go straight to the Exchequer. |
The Budget will also confirm the end of inheritance tax on family homes worth up to £1m. | The Budget will also confirm the end of inheritance tax on family homes worth up to £1m. |
Mr Osborne is expected to tell MPs on Wednesday the threshold at which the tax is levied will rise for couples from £650,000 after April 2017. | Mr Osborne is expected to tell MPs on Wednesday the threshold at which the tax is levied will rise for couples from £650,000 after April 2017. |
The chancellor is not expected to outline the £30bn in departmental spending cuts that the Institute for Fiscal Studies says he will need to find over the next three years on Wednesday - these are likely to be set out in the autumn in a spending review. | |
Are you affected by issues covered in this story? You can email haveyoursay@bbc.co with your comments. Please leave a contact number if you're happy to be contacted by BBC journalist. | Are you affected by issues covered in this story? You can email haveyoursay@bbc.co with your comments. Please leave a contact number if you're happy to be contacted by BBC journalist. |