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David Cameron signals deep cuts in welfare budget

By Gavin Cordon

Published 23/06/2015

Keynote: Cameron yesterday
Keynote: Cameron yesterday

David Cameron has signalled that ministers are preparing deep cuts to tax credits as he defended the Government's plans to slash £12bn from the welfare bill.

The Prime Minister said that Britain needed to become "a higher wage, lower tax, lower welfare society" rather than simply dealing with "symptoms" of low pay by topping up people's pay packets.

In a keynote speech in Runcorn in Cheshire, he vowed to end the "merry-go-round" where people on low pay paid tax to the Government only for the Government to hand back the money in welfare payments.

His comments come after Chancellor George Osborne and Work and Pensions Secretary Iain Duncan Smith confirmed plans to strip another £12bn off the benefits bill. The announcement dashed speculation that the reduction could be scaled back or delayed when Mr Osborne sets out further details in his first all-Conservative Budget next month.

With pensioners, the disabled and child benefit all protected, the brunt of cuts is expected to fall on tax credits and housing benefit.

Mr Cameron said: "There is what I would call a merry-go-round. People working on the minimum wage having that money taxed by the Government and then the Government giving them that money back - and more - in welfare."

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