Page last updated at 12:48 GMT, Tuesday, 11 December 2012

Welfare changes will hit working families, Labour claims

Labour has repeated claims that welfare changes announced by the chancellor in the autumn statement will hit working families.

George Osborne announced a fresh squeeze on benefits which will lead to a reduction in the welfare bill of £3.7bn in 2015-16.

Shadow chancellor Ed Balls told MPs that 60% of families who will be hit by the changes are in work, and that figures by the Institute for Fiscal Studies show the the cuts will cost an average one earner couple with children £534 a year by 2015.

"Why is he making striving working families pay the price for his economic failure?" Mr Balls asked Chancellor George Osborne during Treasury questions on 11 December 2012.

Mr Osborne responded that working households would be £125 better off as a result of increases in the income tax threshold announced in the autumn statement.

Income tax personal allowances will go up by £1,335 - £235 more than previously announced - so no tax will be paid on earnings under £9,440.

The chancellor told the Commons the government was forced to take difficult decisions on the public finances because of the "mess" left by Labour.

He asked Mr Balls whether Labour intended to support the legislation containing the welfare changes - but was quickly reprimanded by the Speaker for posing questions to the opposition when only ministers were expected to answer questions.

Mr Balls said Labour would look at the legislation "but if he intends to go ahead with such an unfair hit on middle and lower income working families while he is giving a £3bn top-rate tax cut we will oppose it".

During the hour-long session the chancellor announced that the next Budget will be on 20 March 2013.

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