ANKARA
The first budget solely from Britain’s Conservative Party since 1996 saw welfare spending slashed while introducing a compulsory living wage for low-paid workers on Wednesday.
The budget - which, unlike early years, was drafted without the input of a coalition partner - also saw tax cuts for companies and workers as Chancellor George Osborne attempted to rein in the U.K.’s deficit, currently at around 5 percent of GDP or about £90 billion ($138 billion).
Addressing parliament in speech broadcast on national TV and radio, Osborne insisted the budget was aimed at improving the lives working people.
"Britain still spends too much and borrows too much," he said, describing the budget as a “plan for Britain for the next five years to keep moving us from a low wage, high tax, high welfare economy to the higher wage, lower tax, lower welfare country we intend to create," the BBC reported.
The chancellor’s plans include cutting corporate tax to 18 percent by 2020 to encourage new jobs and phasing out a levy on banks, replacing it with an extra 8 percent tax on profits.
In his final comments to lawmakers, Osborne announced a compulsory “national living wage” - effectively an hourly minimum wage - that would rise to 9 pounds ($14) by 2020 from the current 6.50 pounds.
However, the measure was tempered by a four-year freeze for working-age benefits, a limit to workers’ tax credits, removing housing benefits from under-21s and abolishing student grants - all part of 12 billion pounds ($18 billion) worth of planned cuts to Britain’s welfare bill.
In addition, public sector pay rises would be limited to 1 percent over the next four years.
The budget also abolished “non-dom” tax status, which allows residents to avoid paying tax on foreign earnings even if they live in the U.K.
Personal tax allowance - the amount each worker earns before starting to pay tax - was raised to 11,000 pounds ($16,900) a year.
The acting leader of the opposition Labour party, Harriet Harman, said the measures were “making working people worse off.”
