George Osborne abandons cuts to Universal Credit after IDS quit threat - report

Posted On: 
15th November 2015

Iain Duncan Smith has “won the day” and seen off attempts by George Osborne to cut £2bn from Universal Credit, the Sunday Times reports.

The Chancellor was pursuing the savings as mitigation to his planned £4.4bn cuts to tax credits after the House of Lords urged the Government to think again on the reforms.

According to the Sunday Times, Mr Osborne will now seek deeper cuts in housing benefits as he aims to meet his pre-election pledge of cutting the welfare budget by £12bn.

Mr Duncan Smith allegedly threatened to resign as Work and Pensions Secretary if the savings were found through cuts to his Universal Credit system.

Claimants currently lose 65p in every extra pound they earn as benefits are withdrawn. Following £2bn cuts to Universal Credit, claimants would have lost 75p in every extra pound.

A Conservative source told the Sunday Times: “Iain’s won the day. No one wants him resigning. Housing benefit is now being looked at instead. There are still questions around Universal Credit but you’re not going to see anything like 75p.”

Mr Duncan Smith is reportedly working on a shared ownership scheme in a bid to drive down the housing benefit bill, where tenants living in local authority housing for three years would be granted 70% of the equity in the home and rent the remaining 30%.

In conjunction, Mr Osborne is expected to bring forward rises in the income personal tax allowance to soften the impact of his cuts to tax credits, the paper claims.

He is also in talks with Home Secretary Theresa May and Mayor of London Boris Johnson over further cuts to policing.

But Mr Johnson is adamant that further cuts to police funding could lead to “disorder” in London.

“I’ve got a philosophy about police numbers. There are several reasons why you should keep them high. You need to have police out there on the beat,” he told the Sunday Times.

“London has grown massively since I’ve been mayor. It has huge potential strains. With a young population, there is lots of potential for disorder in town centres.

“You’ve got to have police out on the streets. It’s what people expect and what they like and it’s what makes the city very, very safe.

“It’s one of the fundamentals for the economic success of London at the moment. If you talk to international investors and people who choose London over other cities, it’s because it’s safe. I want the cops there.”