George Osborne: £12bn in welfare savings have been found

[frigidmagi]

bbc

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 the BBC will have to meet the £650m cost of 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:
The benefits cap - the total amount a family can claim a year - will be cut to £23,000 in London (the BBC understands the cap will be £20,000 per household outside of London)

An indication that he would not reduce the top rate of income tax after Tory MPs called for a cut

The BBC needed to make a "contribution" towards the deficit, which, BBC News understands, will include the corporation having to cover the free licences

The benefit cap is likely to affect 89,000 households and save £1.67bn over the next five years, according to Treasury sources.

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.

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.

By Nick Higham, BBC News
Mr Osborne seems to be offering a deal, perhaps to be announced in the Budget: a commitment to change the law so that iPlayer viewers also have to pay the licence fee.

It won't raise anything like enough to make up for that lost £650m but it would be a sign that the government is serious about protecting the BBC's long-term future in a world of rapidly changing technology.

And from the chancellor's point of view, offloading the over-75s' licence fee on to the BBC is a nifty bit of political footwork.
It goes a long way towards the government's target of cutting £12bn from the benefits bill.

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.

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.

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.

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.

[LadyTevar]

So... is this more Austerity or not?

[frigidmagi]

So... is this more Austerity or not?

Tev, I just posted an article that explains exactly what the British government is doing. So I'm not sure if your question is entirely serious.

[frigidmagi]

You know what? No, that was rude. I'm sorry.

Tev, Austery is cutting government spending in order to reduce or get rid of entirely government deficient spending (which is spending more money then you're taking in). In theory it suppose to be added with increased taxes but rarely is in the modern day. Boy George as he is known in some circles here, has announced that the United Kingdom will be cutting 12 billion dollars or more from social welfare spending. For example he is putting harsh limits on how much a family can receive over a year and raising the rent on a number of people in government owned housing.

He also announced that they weren't going to tax people's inheritances unless it was more then a million dollars.

[Norseman]

But Mr Osborne also announced:
The benefits cap - the total amount a family can claim a year - will be cut to £23,000 in London (the BBC understands the cap will be £20,000 per household outside of London)

Similar acts in other countries have resulted in obvious circumventions, that is to say people find ways of splitting families up in more legal family groups. Certainly actual welfare frauds are quick to figure this out, but as money gets tighter even people in genuine need will need to use tricks like this.

I found a description of how the act works, suffice it to say it is pretty dire, but not quite as unspeakably horrid as it might first hear. For one you are exempt from the cap if one or more family members are on disability.

The Budget will also confirm the end of inheritance tax on family homes worth up to £1m.

I can see why something like this would be approved even in a lot of poorer areas. IF for instance you live in parts of Wales where real-estate prices are driven sky-high by outsiders wanting a summer home. It is hard to be forced to sell the family home just because real estate prices have changed massively.

[LadyTevar]

So... is this more Austerity or not?

Tev, I just posted an article that explains exactly what the British government is doing. So I'm not sure if your question is entirely serious.

It wasn't, entirely.
While the "no taxes on under $1mil" is good, the rest if more strangulation of the working poor. The entire European Union is committing suicide by cutting out Welfare Systems and other aid, and still wondering WTF they're drowning. The US is nearly as bad.

WWIII isn't going to be one nation against another -- its' going to be a massive uprising of the poor vs the rich.