George Osborne: Benefit critics talk 'ill-informed rubbish'

George Osborne has defended benefits and tax changes, accusing critics of peddling "headline-seeking nonsense".

The chancellor claimed in a speech to supermarket workers that nine out of 10 working households would be better off.

The shake-up, including cuts to housing benefit for some social housing tenants with a spare room and alterations to council tax, took effect on Monday.

Some churches, charities and campaign groups, as well as the Labour Party, have criticised the changes as unjust.

System 'broken'

This month saw the start of sweeping changes across public services including the benefits system.

Mr Osborne argued that the government had had to take difficult decisions to cut the deficit and said the current benefits system was fundamentally "broken".

Changes include:

• The introduction of a £26,000 cap on the amount of benefits a household can receive

• A cut to housing benefit for working-age social housing tenants whose property is deemed to be larger than they need

• Disability living allowance replaced by personal independence payment

• Working-age benefits and tax credits to rise by 1% - a below-inflation cap

The chancellor, speaking at a Morrisons distribution depot in Kent, said he was "proud" of the changes which make benefits and tax fairer and help the UK compete globally.

He also believes the changes have support, saying those who do not agree with him are on the wrong side of public opinion.

Labour says the reforms will hit the poorest 10% of people hardest while those in the top 10% will gain.

However, Mr Osborne said: "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. So this month we're going to put things right.

"This month, around nine out of 10 working households will be better off as a result of the changes we are making. This month we will make work pay."

He said: "Now, those who defend the current benefit system are going to complain loudly. 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. 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."

Petition started

"There's nothing 'kind' about parking people who could work on benefits. There's nothing fair about a something-for-nothing culture.

"The pundits and politicians who are spending this week firing off letters to newspapers, or touring the television studios, are missing what people actually want. "

For Labour, shadow chancellor Ed Balls said: "George Osborne should be straight with the British people and admit that millions on middle and low incomes are paying the price for his economic failure, while he gives a huge tax cut to millionaires this week."

He added: "The benefits bill is rising under this government because our economy is flatlining. Inflation is rising and unemployment is high. The best way to get the benefits bill down is to get our economy growing strongly and get people back to work."

Len McCluskey, general secretary of the Unite trade union, said Mr Osborne's speech was intended to create division.

"The sight of the chancellor exhorting the low waged in work to turn their backs on the poor out of work has to mark a new low for one of the highest offices in the land," he said.

Charities also expressed concerns about the welfare changes.

Gingerbread, which campaigns for single parents, said the cuts would "push more families, both in and out of work, into poverty", while children's charity Barnardo's appealed to ministers to re-think the cap on benefit increases.

On Monday, Work and Pensions Secretary Iain Duncan Smith insisted changes to the welfare system were fair.

When asked if he could live on £53 a week, in response to a question posed by a working benefits claimant, Mr Duncan Smith said: "If I had to I would."

A petition challenging Mr Duncan Smith to prove his claim was set up on the Change.org website. It had been signed by more than 250,000 people by 17:00 BST on Tuesday.

Mr Duncan Smith dismissed the petition as a "complete stunt" and told his local Wanstead and Woodford Guardian he had been unemployed twice so "I know what it is like to live on the breadline".