Welfare row as Osborne says cuts are needed

 
Tim Wallace
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THE NEXT government will need to cut billions of pounds more off the welfare budget if other services are not to suffer, George Osborne told MPs yesterday.

His warning runs directly counter to his deputy, Liberal Democrat Danny Alexander who has reassured his party he does not want “ideologically driven” spending cuts.

“I think the next government will want to undertake further welfare savings,” Osborne told the Treasury Select Committee (TSC) of MPs in his post-Autumn Statement hearing.

It came after Alexander said that maintaining his party’s independence from its Conservative coalition partners.

“Some Conservatives are ideologically wedded to continuous cuts as the route to a smaller state – they see endless budget surpluses funded only by ever more spending cuts as the means to that end,” he wrote in the Independent. “I do not agree with that at all. Tax rises on the wealthy will be needed to ensure that the burden is shared fairly.”

Meanwhile the chancellor told the TSC he does not have a clear plan in place yet to bring the Help to Buy scheme to an end.

MPs accused him of “adding vodka to the punch bowl just as the party gets going” by introducing the mortgage guarantee scheme.

And they expressed concern the market could be rocked by the scheme’s sudden withdrawal, planned for three years’ time.

“I am happy to consider further how that exit will happen,” Osborne told the committee.