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Osborne announces new budget

Article By: ,  Financial Analyst
July 9, 2015 3:36 PM

On Wednesday (July 8th), chancellor George Osborne put forth his new 2015 budget.

Mr Osborne claims that his new fiscal plan for the UK represents "the new centre of British politics" and it includes bold promises, including a rise in the minimum wage and cuts to welfare.

During an interview with BBC Radio 4's Today programme on Thursday, Mr Osborne explained his "new settlement" with Britain.

He said: "What we are saying to business is: 'Pay higher wages but you get lower taxes.' What we are saying to people is: 'You get a bigger pay cheque but there will be a less generous benefit system.' What we are saying to the country is: 'We are going to spend less but we are going to live within our means.' That is the new settlement and I think it is the new centre of British politics."

The chancellor believes that Britain has a problem with low pay that needs to be addressed and that the current welfare system was unsustainable.

Wrong approach

Commenting on the new budget, shadow chancellor Chris Leslie said that the rug had been pulled from the quality of their lives by a work penalty that would prevent people from getting jobs.

He said: “We are delighted if he wants to steal some of the policies in our manifesto.” But he also believes that the chancellor had taken the wrong approach. 

"The figures do not add up," he warned.

However, Mr Osborne insisted that the minimum wage rise, coupled with cuts to tax credits, would allow a family working full-time on the minimum wage to be better off.

John Cridland, the director general of the Confederation of British Industry (CBI), said the jury was out on the rise in minimum wage but he warned it could result in job losses in restaurants, hotels and the social care sector.

According to the Treasury, the new minimum wage for over-25s will be £7.20 starting next year. This will rise to £9 by 2020. The conservatives insist that these pay rises will not force employers to cut jobs.

 

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