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Cameron hails coalition-free Budget

Published 11/07/2015

Prime Minister David Cameron said the Tories are on the side of working people
Prime Minister David Cameron said the Tories are on the side of working people

The radical Budget delivered by George Osborne shows what the Conservatives can do "freed from the constraints of coalition", David Cameron will tell party activists.

The Prime Minister will address the Conservative Party's National Convention and claim the combination of welfare cuts and reduced income and corporation taxes had not been possible during the years sharing power with the Liberal Democrats.

Mr Cameron will claim that the measures have shown the Tories to be the "real party for working people".

The Prime Minister's defence of the Budget follows analysis by the respected independent Institute for Fiscal Studies (IFS) which found th e poor will lose out more than the rich from the Chancellor's "regressive" package.

Mr Cameron will tell the gathering in London: " When I said before the election that the Conservatives would be the real party for working people I was deadly serious. The last few weeks have shown exactly what we mean.

"Legislating for more childcare. Setting out plans for helping people buy their housing association home. And now in the Budget reducing income tax and introducing the national living wage - giving hard working people a pay rise and a tax cut.

"We are helping people into work - and really making work pay

"I have always been a One Nation Conservative - and now, freed from the constraints of coalition, we can demonstrate what that can really do for the country."

The IFS cast doubt on Mr Osborne's claim that the Budget would pave the way to a "higher-wage, lower-tax, lower-welfare" Britain.

While welfare payments will indeed be cut to the tune of £12 billion, the Chancellor's package would in fact increase taxes by £6.5 billion a year by 2020 and it was a "gamble" to rely on a new mandatory "national living wage" (NLW) to increase incomes, the IFS found.

The think tank found that the average low-paid worker on tax credits would "unequivocally" lose more from benefit cuts announced by the Chancellor than they would gain from the introduction of the NLW, which will be worth £7.20 an hour to workers aged 25 or more - rising to £9 by 2020 - compared to £6.50 on the current national minimum wage.

IFS analysis suggested that the poorest tenth of society will lose around £800 a year as a result of tax and benefit changes in the years up to 2019 - equivalent to almost 7% of their net income - while the hardest-hit group will be the second-poorest tenth, losing around £1,300 a year.

But Mr Cameron will say: " The Budget's combination of reducing welfare, cutting income tax, reducing corporation tax and insisting on a national living wage is an approach that will make sure the lowest-paid benefit from our economic success.

"It is a combination that wasn't possible in coalition - but is totally possible now. We reduce welfare and lower taxes at the same time. We cut business tax but insist on higher wages for the lowest paid.

"It shows that by being more radical we can be more progressive. It's the One Nation approach delivering for working people."

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