George Osborne has buried a key legacy of Margaret Thatcher when he condemned the way her government placed thousands of unemployed people on disability benefits as “quick-fix politics of the worst kind”.
In an attempt to show an even-handed approach, as he embarked on a staunch defence of the coalition’s welfare changes, the chancellor criticised “governments of all colours” that have “parked” too many people on disability benefits.
The chancellor sidestepped questions about whether he could survive on £53 a week after Iain Duncan Smith said he could if he had to.
“I don’t think it is sensible to reduce this debate to an argument about one individual’s set of circumstances and the example that was given on the BBC radio,” Osborne said after the Today programme cited a market trader David Bennett who lives on that amount.
The chancellor added: “We have a welfare system where actually there are lots of benefits available to people on very low incomes. There is jobseeker’s allowance and income support, there is a working tax credit, there is council tax benefit, there is housing benefit. So there are a number of different benefits there.
“This debate is not about any individual. This is about creating a welfare system that rewards work, that supports people who do the right thing, that helps those that want to get on in life and has a regard for the many millions of people who work very hard and pay their taxes and expect their money to be well spent.”
Osborne made his remarks as he addressed workers at the main Morrisons supermarket distribution centre in the south-east of England at Sittingbourne in Kent.
The Treasury chose the centre because it is based in the swing parliamentary seat of Sittingbourne and Sheppey, and where the Morrisons distribution workers earn an average of £20,000. Tory research shows that the government’s welfare changes, notably the household benefit cap of £26,000, will appeal to such workers, who reportedly resent seeing their taxes fund benefits.
Amid criticisms that he is turning the clock back to the 1980s, the chancellor criticised the Thatcher government for the way it placed many unemployed people on disability benefits. The chancellor said: “Governments of all colours let too many unemployed people get parked on disability benefits, and told they’d never work again. Why?
“Because people on disability benefits don’t get counted inunemployment figures that could embarrass politicians.
“It was quick-fix politics of the worst kind – and the people who lost out were you, hard-working taxpayers who had to pay for all this and those on disability benefits who could have worked but were denied the opportunity to do so.”
The chancellor was also highly critical of the Labour party, which says the welfare changes will penalise poor people. In remarks that appeared to be aimed at the shadow chancellor, Ed Balls, Osborne said: “In recent days we have heard a lot of, frankly, ill-informed rubbish about these welfare reforms. Some have said it’s the end of the welfare state. That is shrill, headline-seeking nonsense.
“I will tell you what is true. Taxpayers don’t think the welfare state works properly any more. When did this start to happen? When we created a system that encouraged people to stay out of work rather than find a job.
“Our reforms are returning welfare to its most fundamental principles – always helping the most vulnerable, but giving people ladders out of poverty. And the politicians who should have to explain themselves are those who have given up on trying to get people working again.”
The chancellor reassured one Morrisons employee, who raised concerns about eastern European workers from the EU who arrange for UK child benefit to be paid to their families back home. Osborne said the government was working hard to stop this, though he said ministers had to work within EU law.
The chancellor said: “The truth is we are absolutely wrestling with that issue at the moment and trying to find a way that is legal to make sure that benefits do not got to the continent of Europe. The EU rules are pretty tough and we can’t act illegally because someone would just go to a court and get it overturned. But we are looking at all sorts of ways to make sure that British taxpayers pay for benefits that are paid for in this country rather than abroad.”
In a response, 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.
“Figures from the independent IFS show that the average family will be £891 worse off this year because of tax and benefit changes since 2010. On top of this incomes are being squeezed further as prices rise faster than wages, yet the chancellor refuses to rule out cutting or freezing the minimum wage.
“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. Ministers must explain why they will not back Labour’s plan for a compulsory jobs guarantee for the long-term unemployed.”