OAPs will be better off: Osborne

George OsborneGeorge Osborne has claimed that pensioners will be better off as he faced a mounting backlash over his £1 billion "granny tax" raid.

The Chancellor's move to scrap age-related allowances introduced by Winston Churchill in 1925 has been condemned as "outrageous" by older people's groups.
But speaking on ITV's Daybreak, Mr Osborne said: "No pensioner loses cash. No one watching this programme is a pensioner who is going to lose any cash as a result. They're not going to lose cash, we're going to increase the benefit. At the same time they'll be better off because the basic state pension is going up in a couple of weeks' time by over £5 a week. No one loses any cash from this Budget."

Mr Osborne used his Budget to cut the 50p top rate for Britain's wealthiest earners and lift thousands of low-paid workers out of taxation altogether.
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But the Treasury acknowledged that 4.5 million pensioners would lose out as a result of the decision to phase out age-related allowances.

Under the Chancellor's plans, the allowances will be withdrawn for new pensioners from April next year while existing pensioners will have their allowances frozen at £10,500 for the over-65s and £10,660 for the over-75s until overall tax thresholds catch up with them.

Although Mr Osborne insisted there would be no cash loss to pensioners, Treasury sources said existing pensioners would be, on average, £63 a year worse off while new pensioners would lose out to the tune of £197 a year.

Asked about today's newspaper front pages, Mr Osborne said: "The headline is not about the tax cuts for the rich, or it shouldn't be. Because actually, we are not cutting tax for the rich, they are paying more on their property. Everyone watching this programme who is in work is better off as a result of the Budget. There are 23 million people - that's pretty much all the people on lower middle incomes - watching this today who are better off as a result."

The Chancellor denied that he personally would be better off after cutting the top rate of tax, saying: "My salary is less than the 50p rate but I'm not thinking about that, I'm trying to think about what's right for the country."

He added: "My responsibility is not to grab the newspaper headlines. My responsibility to the people watching this programme is to try and get jobs in Britain and to get this economy moving. Ultimately what people watching this programme want are jobs for themselves and jobs for their children. They want to feel that Britain is not being left behind when you hear about China and India and all these other countries."

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