The Chancellor has pledged to save billions of pounds, and one way of doing this will be to reduce the welfare bill and cutting benefits from the poorest claimants.
George Osborne is expected to announce in his autumn statement a below-inflation rise in key state benefits, including unemployment payments, while also raising revenue by cutting pension tax relief for the wealthy.
Charities and campaigners have urged Osborne not to penalise the poor, especially with inflation rises making living costs even higher.
This comes as he announces that current austerity measures will have to continue until 2018, as well as a report on budget control showing that he is likely to miss his target set for getting the debts under control, which he has admitted on the Andrew Marr show on BBC 1.
Nick Clegg, leader for the Liberal democrats, is against the plans to freeze benefit payments, and is instead is pushing for a cut in the amount a person can put aside for retirement each year before incurring tax,
Following the fierce objections by Clegg’s party, Osborne appears to be stopping short of a freeze on benefit payments, but will be imposing a cut of several billion from the benefit bill.
The Prime Minister also looks set to drop the cut in housing benefits for under-25s after the Lib Dems strongly opposed it. Cameron and Osborne had put the idea forward a few times earlier this year, but this has been strongly opposed by the Liberal Democrats, as well as housing associations and charities, and now looks as though David Camerons plans will be omitted from George Osbornes autumn statement.
In a letter from 50 charities and campaigners, they said:
It would be a tragedy for millions, and a travesty for the economy, to push the poorest into deeper poverty by this week failing to uprate benefits in line with inflation, or by making other cuts to social security for families and disabled people.
The Lib Dems have said they realise that cuts need to be made but will only allow further reductions in benefits if these are balanced against taxes on the wealthy; Osborne is expected to announce new restrictions on pension tax relief for high earners.
Greg Mulholland MP, who co-chairs the Lib Dems’ work and pensions policy committee, has said last night:
The Lib Dems would not stand for cutting housing benefits for under 25-year-olds which would not only be unjust and unfair but would have unacceptable consequences for many young people. Neither do we think a freeze in working-age benefits is acceptable.
Having spent the last year making sure that benefits are directed to those who really need them most, a move to cut them now in real terms is not the right thing to do.
It looks as though, when Osborne announces his autumn statement this week, he won’t be pleasing anyone after taking from both the rich and the poor, but hopefully a fair compromise will be ensured and the welfare of those on benefits will be taken in to consideration instead of just the money being put in to it.