Osborne: Why benefits system had to change

With a series of major changes to benefits coming into effect this month, Mr Osborne hit out at critics of the Government’s plans accusing them of talking “ill-informed rubbish”.

He said ministers were simply trying to restore “some common sense and control on costs” in a system which had become unaffordable.

Speaking at a supermarket distribution centre in Kent, he warned opponents they were “out of touch” with ordinary working families whose taxes paid the welfare bills.

The Government has come under increasing attack in recent days, both from the Labour Party and from some churches which have expressed concern at the impact benefit cuts will have on the poorest in society.

Mr Osborne however insisted that he was “proud” of what the Government was doing, showing it was “on the side” of ordinary voters.

“Those who campaign against a cap on benefits for families who aren’t working are completely out of touch with how the millions of working families, who pay the taxes to fund these benefits, feel about this,” he said.

“I’m proud of what we’re doing to restore some common sense and control on costs. In recent days we have heard a lot of, frankly, ill-informed rubbish about these welfare reforms.

“Some have said it’s the end of the welfare state. That is shrill, headline-seeking nonsense. I will tell you what is true. Taxpayers don’t think the welfare state works properly anymore.”

Mr Osborne said that the system had not only become unaffordable , it was also now so complicated that people were better off on the dole rather than going to work - something the Government’s reforms were designed to change.

“These vested interests always complain, with depressingly predictable outrage, about every change to a system which is failing. I want to take the argument to them,” he said.

“Because defending every line item of welfare spending isn’t credible in the current economic environment. Because defending benefits that trap people in poverty and penalise work is defending the indefensible.

“The benefit system is broken; it penalises those who try to do the right thing; and the British people badly want it fixed. We agree - and those who don’t are on the wrong side of the British public.”

Mr Osborne said that changes, such as cutting housing benefit for social housing tenants deemed to have a spare bedroom, were simply asking people on welfare to take the same choices as working families.

“For too long, we’ve had a system where people who did the right thing - who get up in the morning and work hard - felt penalised for it, while people who did the wrong thing got rewarded for it. That’s wrong,” he said.

“What this Government is trying to do is to put things right. We’re trying to make the system fair on people like you, who get up, go to work, and expect your taxes to be spent wisely.

“And we’re trying to restore hope in those communities who have been let down by generations of politicians by getting them back into work.”

Wider welfare and tax changes coming into force this month will also see council tax benefit funding cut, and working-age benefits and tax credit rises pegged at 1% - well below inflation - for three years.

Disability living allowance (DLA) is being replaced by the personal independence payment (PIP), while trials are due to begin in four London boroughs of a £500-a-week cap on household benefits, and of the new Universal Credit system.

Mr Osborne refused to be drawn on whether he could manage on £53 a week after Work and Pensions Secretary Iain Duncan Smith said yesterday that he could if he had to in response to one claimant who said that was all he would be left with.

“I don’t think it’s sensible to reduce this debate to an argument about one individual’s set of circumstances,” Mr Osborne said in response to questions. “We have a welfare system where there are lots of benefits to people on very low incomes.”