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£12 bn worth of cuts to be announced in budget


George Osborne, Chancellor of the Exchequer, has claimed that he has decided how the government will make £12 billion worth of welfare cuts that had been promised in the Conservative Party manifesto.

These cuts will be announced in Osborne’s new budget tomorrow, the first all Conservative budget in more than 20 years. They are expected to include a reduction in the benefit cap and removing subsidies for social housing. The Chancellor has also announced that he would not reduce the top rate of income tax after some Conservative MPs called for a cut.

Under the changes to social housing, local authority and housing association tenants in England who earn more than £30,000 - or £40,000 in London - will have to pay up to the market rent, Mr Osborne will say. The benefit cap will be reduced to £23,000 in London and what is thought to be £20,000 in the rest of the UK.

Osborne has also confirmed that he will be looking to make cuts to tax credits for people on low incomes. He said the low paid would be compensated by tax cuts in an effort to end the "merry-go-round on which people pay their taxes and then get back benefits" and the treasury would also convince firms to pay higher wages.

Osborne and the Conservatives have claimed that the welfare cuts are needed to prevent deeper cuts to public services and to complete the governments goal to eliminate the deficit and run a surplus.

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