6 Oct 2015

Boris Johnson: welfare reforms must protect low paid

London Mayor Boris Johnson challenges his Conservative leadership rival George Osborne to protect the low paid when his welfare reforms are introduced.

Speaking at the Tory conference in Manchester, Mr Johnson joined growing calls in Conservative ranks for a fresh look at the way changes to in-work tax credits will affect people on low wages.

He said: “We must make sure that as we reform welfare and as we cut taxes that we protect the hardest working and the lowest paid.

“Retail staff, cleaners, the people who get up in the small hours, work through the night because they have dreams about what they and their families can achieve – the people without whom my economy, the London economy, would simply collapse, the aspiring, striving working people.”

As a result of changes to tax credits introduced by Mr Osborne in his last budget, millions of working households are expected to be worse off ahead of planned rises in the minimum wage and further cuts to the personal allowance.

‘Make work pay’

David Cameron has defended the changes, saying they are part of an overall package that will “help make work pay” and ensure that some families will be £2,400 better off in future.

The government argues that the taxpayer is subsidising low wages through tax credits and wants to shift the burden on to employers, who will have to pay a “national living wage” from April 2016.

Boris Johnson

The independent Institute for Fiscal Studies has warned that 13 million families will lose an average of £240 a year when the cuts come into effect, while 3 million will lose £1,000 or more.

Health Secretary Jeremy Hunt caused controversy on Monday when he told a Tory fringe meeting tax credit cuts were a “very important cultural signal” that Britain is seeking to match the work ethic of Asian countries and America.

Conservative MP David Davis has warned that the changes could prove as damaging to the party as the poll tax was under Margaret Thatcher.