A new £9 an hour national living wage was the final flourish at the finale of a Budget which saw the Chancellor take full advantage of the Conservative’s election win to shift the focus of state spending from welfare to work.
Mr Osborne’s plan to raise the wages of six million people by 2020 wrong-footed Labour’s planned attack suggesting the Chancellor was cutting state help for people on low pay without a plan to increase their incomes.
Describing his Budget as a “plan for working people” from a “one nation” government, he told MPs: “Let me be clear: Britain deserves a pay rise and Britain is getting a pay rise.”
The Chancellor warned current levels of welfare spending are “not sustainable” and stopping the country spending more on education and infrastructure.
He unveiled plans to lower the amount families can receive in benefits as well as cutting tax credits and housing benefit among a raft of measure to reduce the welfare bill by £12 billion a year.
In a sign of his confidence, the Chancellor also had the audacity to adopt one of Labour’s election promises with a plan to scrap non-dom tax status.
And with one eye on the race to succeed David Cameron, who will step down before the next election, he moved to meet Tory backbench concerns in areas like defence where he promised to meet NATO’s target to spend two per cent of national income.
“This is a big Budget for a country with big ambitions. It is a Budget that sets the way to secure Britain’s future,” he said.
Alongside measures to balance the Government’s books by 2020, the Budget also saw Mr Osborne honour a series of election pledges including an increase in NHS funding, more free childcare and inheritance tax.
But Labour warned the economic recovery was still fragile as independent forecasts published alongside the Budget showed growth is likely to be slower than expected this year.
Acting Labour leader Harriet Harman said: “He talks one nation, but many of the measures announced today will make this country more divided.
“The hopes of millions of working people are more important than his hopes of being the future Tory leader.
“This Chancellor is personally ambitious, but when the economic recovery is still fragile, he should be ambitious not just for himself, but for the country.”
And there were signs tonight that Mr Osborne could face a backlash from business over the costs of the living wage.