LONDON: British Prime Minister David Cameron’s government will this week unveil the first Conservative budget in almost 20 years, targeting deep welfare cutbacks to honour a campaign pledge to slash spending.
Finance minister George Osborne, boosted by a surprise May 7 vote giving his centre-right Conservative Party an outright majority, will present his latest spending and taxation plans before parliament on Wednesday.
Osborne will have a free hand with public finances after five years of coalition with the centrist Liberal Democrats, while the summer budget comes amid mounting global concern over the debt crisis in anti-austerity Greece.
Chancellor of the Exchequer Osborne has already vowed that his second budget so far this year will unleash more austerity to raise another £12 billion ($19 billion, 17 billion euros).
“You do have to look at the benefits system, the welfare system, and make sure that it is fair for working people,” Osborne said Sunday.
“It is not fair that people out of work can earn more than people in work so we are going to cut the benefit cap.”
He will seek to cap annual welfare payments at £23,000 per household in London, against the current level of £26,000. The amount will be lower still outside the capital.
Osborne has also said that Britons on higher incomes in subsidised council housing will have to pay closer to the market level of rent.
The Conservatives want to lower the tax burden, but also address concerns that the welfare system encourages a culture of state handouts.