THE ruling Conservatives have promised the biggest shake-up of Britain’s welfare system in 60 years.
The announcement comes two weeks before the government unveils cuts to slash a huge budget deficit.
Chancellor of the Exchequer George Osborne yesterday tore up a founding principle of the welfare state as he began a “tough but fair” raid on rich and poor families.
Mr Osborne gambled politically by cutting child benefits for wealthier parents, in a move that will cost a family with three children pound sterling. 2500 ($4125) a year.
The move, which ends a decades-old universal payment, will raise pound sterling. 1 billion from 1.2 million families. He announced a new limit on the amount any household can claim in benefits — set to cost up to 50,000 families an average of pound sterling. 5000 a year.
The twin assault offered a first taste for individuals of the medicine Mr Osborne is prescribing to cure the record deficit of pound sterling. 154.7bn. “No more open-ended chequebook,” he told delegates at the Conservative Party conference in Birmingham. “No family should get more from living on benefits than the average family gets from going out to work.”
Mr Osborne said he wanted “a new welfare system where it always pays to work, tough but fair — because we are all in this together”.
He appealed to “the British sense of fair play” as he used his speech to argue that everyone had to shoulder their share of the deficit reduction drive.
Tory MPs were uneasy that scrapping child benefit for any household with someone earning more than pound sterling. 44,000 could turn a slice of Middle England against the austerity drive. But Mr Osborne said Britain had to face some “home truths” about a welfare system that trapped millions in poverty yet extended benefits to the better off that were “difficult to justify”.
He used his speech to lay out financial restrictions on every economic stratum — warning the very wealthy of curbs on financial industry bonuses if money was not unlocked to help small businesses, as well as a drive against tax evasion by the super-rich, which he described as “unacceptable at the best of times”.
He made the economic case for the spending cuts that he will detail on October 20, saying it offered the only way ahead. “Any other road leads to ruin,” he said.
Mr Osborne said was acting not out of ideological zeal to reduce the size of the state but to liberate public services for the 21st century: “Not cuts for their own sake, but savings to secure our future.”
He said while resources were guaranteed for the National Health Service, funding would not come without reform.
The Conservatives say the existing welfare system allows tens of thousands of families to earn more by claiming benefits than by working.
Prime Minister David Cameron’s Conservative-Liberal Democrat coalition government is set to outline cuts of about 25 per cent in most departments as part of a spending review.
Mr Osborne said the welfare system — which constitutes about a third of government spending — needed root and branch reform. The principle of child benefits for all families dates back to 1946, when Britain’s modern welfare state was created.
Child benefit is a tax-free payment that is paid by the state to all families with children under 16.
It stands at pound sterling. 20.30 a week for the eldest child and pound sterling. 13.40 a week for each subsequent child.
The opposition Labour Party’s work and pensions spokeswoman, Yvette Cooper, said: “It’s better to get the economy growing faster and raise more tax from the banks than to cut support for children in middle income families.”