George Osborne poses with the Budget Box outside 11 Downing St before announcing the government’s annual budget plans

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The text, in essence, is the Chancellor of the Exchequer’s defence of his Summer budget announcement – his seventh, but only the first by a majority Conservative government in 19 years – and his plan to close the deficit (4% of GDP) by 2018-19.

Two of the most significant measures aiming to reach this end are the welfare cuts defended by George Osborne in the text:

– reducing the levels of the tax credits (a.k.a. ‘top-ups’) complementing the incomes of the lower middle class and the working poor (i.e., approximately 4.5m families), and also restricting tax credits to the first two children.

– lowering the benefits cap (i.e., the total benefits a household may receive) from £26,000 to £23,000 in London, and £20,000 in the rest of the country.

Another major employment policy reform defended in the text, as we have seen, is the raising of the minimum wage from £6.50 to £7.20 from April 2016 and then to around £9 an hour by the end of the parliament (i.e., 2020), and rebranding it a “living wage”.

However, the government announced other welfare reforms in July, which are not mentioned in the text, including:

– creating a “youth obligation” for those aged 18-21 compelling them to « either earn or learn, » rather than go straight onto benefits after finishing school: after six months of support and training, young people will be expected to apply for an apprenticeship or traineeship, gain work-based skills, or go on a mandatory work placement, otherwise they will lose all benefits.

– scrapping the automatic entitlement to housing benefit for 18-21 year olds.

– charging higher rents to those on higher incomes living in social housing (families earning over £40,000 in London, or £30,000 elsewhere).

– doubling free child care for parents.

And the other major fiscal measures announced in July include:

– cutting taxes further up the income scale, by raising the threshold at which the 40% tax band kicks in, from £42,000 to £50,000

– raising the threshold for inheritance tax from £650,000 for a couple to £1m.

– cutting the corporation tax from 20% to 18% by 2020.

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