Osborne’s axe falls on the welfare state as Treasury targets £11bn

CHANCELLOR George Osborne wielded the axe at the welfare state in a bid to cut £11bn from the welfare state by the end of this parliament.

In a move that places strain on the Liberal Democrat members of the coalition, Osborne warned Britain’s spiralling welfare bill would bite £192bn out of the nation’s income by 2015 if left unchecked.

The Treasury started by linking benefits payments to the lower consumer price inflation (CPI) index rather than retail price index (RPI), a step that will save an estimated £6bn over five years.

Housing benefits came under fire with state plans to reduce spending by £1.8bn by 2015.

Osborne drew gasps from his audience when he revealed some families had received £104,000 a year in housing support.

Payouts are now to be capped at £280 per week for a one-bedroom property and £400 per week for a four-bedroom property. Housing benefit will drop by 10 per cent for anyone on the dole for more than a year.

The government also wants “sensible utilisation” of social housing and will cap benefits to working age tenants who live in a property that is too large for their household size.