Page last updated at 12:36 GMT, Wednesday, 12 December 2012

Leaders clash over welfare cuts

Prime Minister David Cameron and opposition leader Ed Miliband have clashed over plans to limit welfare spending.

In his autumn statement, the Chancellor of the Exchequer said he would restrict increases of some benefits to 1% over the next three years.

Mr Miliband said the cuts would hit working families hardest, as he raised the matter at prime minister's questions on 12 December 2012.

He claimed 60% of those who will be hit by the changes are in work and pointed to figures by the Institute for Fiscal Studies that suggest working families will be £534-a-year worse off.

The opposition leader said there was a "fundamental" injustice in the cutting of the top rate of income tax from 50% to 45%, when welfare was being restricted.

Mr Cameron accused Labour of being a "party for unlimited welfare".

"Their choice is more benefits paid for by more borrowing," he said, arguing that the opposition was not serious about dealing with the deficit.

The PM told the Commons that increases in the personal income tax allowance mean a person working on the minimum wage working full time will see their income tax bill "cut by one half", adding that two million people had been taken out of paying income tax altogether under the coalition.

"We believe in cutting people's taxes when they're in work," he declared.

Labour has promised to oppose the 1% cap on benefits payments such as tax credits.

At the start of the question session, Labour leader Ed Miliband welcomed the fall in unemployment but said long-term unemployment remained a "challenge".

Mr Cameron agreed it was "stubbornly high" but said long-term youth unemployment had fallen by an "encouraging" 10,000.

But he told MPs there was still "more to do".

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