George Osborne, Iain Duncan Smith to slash welfare budget by £12bn

A day after tens of thousands of people marched through the streets of London demanding an end to austerity, the government announced it is pushing forward with welfare cuts of £12bn (€16.8bn).

In a letter published in the Sunday Times on 21 June, Chancellor George Osborne and Work and Pensions Secretary Iain Duncan Smith said they would introduce the cuts in next month's budget.

Changes include a new benefits cap to be introduced as part of Westminster's plans for "reforming the damaging culture of welfare dependency" to "bring the bloated benefits bill under control."

"We will set out in detail all the steps we will take to bring about savings totalling £12bn a year in next month's budget and at the spending review in the autumn," Osborne and Duncan Smith wrote.

"Reforming the damaging culture of welfare dependency and ensuring that work pays has been central to our mission to make Britain fit for the future.

"It took many years for welfare spending to spiral so far out of control and it's a project of a decade or more to return the system to sanity.

"This government was elected with a mandate to implement further savings from the £220bn welfare budget. For a start, we will reduce the benefit cap and have made clear that we believe we need to make significant savings from other working-age benefits.

"As before, all our reforms will have these central aims: to ensure the welfare system promotes work and personal responsibility, while putting expenditure on a sustainable footing.

"Welfare reform is fundamentally about opportunity and changing lives, supporting families to move from dependence to independence – a vital point, because without social mobility there can be no social justice."

The timing of the publication of the joint letter from Osborne and Duncan Smith may be seen as deliberately provocative, coming a day after protesters marched to protest against further cuts, arguing they were unnecessary and could increase inequality.