New budget plan to make low-income workers worse-off

A British economic think-tank has warned that the new budget plan introduced by the Tory government will negatively affect the low-income workers.

The Institute for Fiscal Studies (ISF) said George Osborne’s new “living wage” will fail to compensate poor households for the £12bn cuts.

The ISF described the plan as regressive as regressive and said it would take “much more” from the poor than the rich.

“Unequivocally, tax credit recipients in work will be made worse off by the measures in the budget on average,” IFS director Paul Johnson was quoted as saying by the British media.

According to IFS, 13 million British families would lose an average of £5 a week by 2020 as a result of the new “living wage”.

Meanwhile, a London-based professor of economics said the budget will negatively affect “the working poor”.

“Definitely, people on unemployment are going to have benefits frozen for 4 years. That’s substantially tougher than expected.  And of course with tax credit change, it is going to affect a lot of working poor, and that is why I think surprises a lot of people. Because the Conservatives say they want to get poor people into work, but they are hitting the working poor,” Keith Pilbeam told Press TV’s UK Desk on Friday. 

Britain's Chancellor of the Exchequer, George Osborne unveiled the country’s new budget that will cut spending on welfare by £12 billion as part of a fresh austerity plan.

The new plan has scrapped student grants, cut housing benefit for under-21s and froze working age benefits.

Some critics have already slammed the budget, saying it mainly targets those who are the most vulnerable in the UK.

“The Chancellor is said to be liberated without the ties of coalition holding him back but what we have heard today suggests his rhetoric is liberated from reality. A Budget for working people? How can you make that claim when you are making working people worse off,” Harriet Harman the deputy Labour leader said.

Meanwhile, the ISF questioned George Osborne's claim that his Budget will make Britain a "lower tax" country. The economic forecaster has said that that the Tory government will raise an additional £6.5 billion a year by 2020.

On Wednesday, anti-austerity demonstrators took to the streets in London to protest against the new spending cuts. 

Demonstrators blocked roads around Parliament in protest at cuts to the welfare system.

The rally was part of nationwide anti-cuts protests organized by campaign group People’s Assembly.

Disabled activists also took part in the protest dubbed "Balls to the budget".

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