Osborne defends tax credits move

Chancellor George Osborne has defended his decision to slash tax credits, insisting that protesters who demonstrated against the cuts were not "representative" of public opinion.

An estimated 60,000 people brought central Manchester to a halt on Sunday as they marched on the Conservative annual conference, demanding an end to austerity and the preservation of tax credits.

The independent Institute for Fiscal Studies has warned that 13 million families will lose an average of £240 a year when the cuts come into effect in April, while 3 million will lose £1,000 or more.

Prime Minister David Cameron on Sunday resisted pressure from former Tory minister David Willetts to review the Chancellor's plans and "ease" the cuts in next month's Autumn Statement.

But Mr Osborne said a "typical" family with one person working full-time on the national minimum wage will be better off overall, when all of the Government's changes to benefits, income tax allowances and the establishment of a new "national living wage" are taken into account.

And he said that maintaining tax credits at their current level would force the Government to divert money away from priorities like health and education.

Mr Osborne told ITV1's Good Morning Britain: "What we are offering ... is a new settlement where we get lower welfare bills, but we get higher wages and lower taxes too, there's help with free childcare, and we also live in a country that lives within its means and that provides security to every working family.

"That's the new settlement and we've got to get on with it if we are going to deliver a country that offers jobs and opportunity in the future."

Mr Osborne said the impact of the tax credit cuts on workers and their families would be offset by the introduction of what he terms a "national living wage" of £7.20 an hour for over-25s next April, as well as by general rises in pay as the economy improves.

Several employers, including supermarkets such as Sainsbury's, Morrisons and Lidl, are already moving towards the national living wage benchmark, which will rise to £9 by 2020 and can be expected to push up wages further up the pay scale, he said.

The Chancellor said it was "not the truth" that families were simply having their income reduced.

He told Good Morning Britain: "The truth is the minimum wage has just gone up this week to £6.70, the national living wage is coming in next April at the same time as the changes to tax credits at £7.20, income taxes have already been cut by me by up to £1,000.

"We have made a set of changes that, if you take them in the round, mean families are better off and at the same time we have a country that has economic security, where more and more of its budget is not going to welfare.

"That is a sustainable future for Britain. We face a choice as a country - we can either decline, allow the welfare bill to become the biggest bill by far in Government, squeeze out spending on our National Health Service, fire teachers and nurses and the like...

"I don't want that to be my country. That's not the country I want for my children or anyone else's children. I want economic security, a country living within its means, people getting proper decent wages with a national living wage. And that's what we are delivering."

Asked about Sunday's protest march, Mr Osborne said: "I just don't think that is representative at all, frankly.That was a big trade union march. There's always a trade union march against the Conservatives when we have a conference, because the trade unions pay for the other political party in this country - the Labour Party.

"The commitments we have made on welfare, including these £12 billion of savings we are talking about, were in a general election manifesto and 11 million people voted for the Conservatives. They voted for the Conservatives because David Cameron and this party offer stability, security and opportunity."

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