Britain's Osborne defends welfare cuts after church attacks

LONDON (REUTERS) - Britain's government on Monday defended a raft of new welfare spending cuts, a key plank of efforts to rein in spending as the economy flounders, after church leaders attacked the changes as unjust.

Finance minister George Osborne and Work and Pensions Secretary Iain Duncan Smith labelled opponents of their plan as "shrill", and insisted it would lead to a fairer benefits system and encourage more Britons to work.

"Of course, if you listened to the shrill voices of the Left you'd think that every change to the welfare system, and any attempt to save money, marks the beginning of the end of the world," Mr Osborne and Duncan Smith wrote in an article published in Britain's Telegraph newspaper.

"We are just restoring the original principles of the welfare state: that those who can work must work, and a life on benefits must not be more attractive than working," they added.

The welfare cuts, which are going into effect this month, are part of government efforts to reduce state spending to tackle a big budget deficit, a plan Mr Osborne says is necessary to retain the confidence of international money markets and keep Britain's borrowing costs low.

However, Britain's economy has suffered two bouts of recession since the plan was introduced with the election of the Conservative-led government in 2010, and growth remains weak - the economy is expected to expand by just 0.6 percent this year.

The Baptist Union of Great Britain, the Methodist and United Reformed Churches, and the Church of Scotland on Sunday attacked the cuts as being unfair to the poor, echoing comments by Anglican leader Justin Welby last month.

The churches said they rejected Conservative attempts to frame the debate on welfare as aspirational "strivers" versus work-shy "skivers", a narrative that is gaining traction in Britain according to some opinion polls.

"A narrative that blames the poor for poverty leads to measures (welfare cuts) such as were announced today," said Methodist Church public policy adviser, Paul Morrison.

"The majority of people in poverty in the United Kingdom today are working," he added.

The new welfare measures include increasing benefit payments by just 1 percent for the next three years, well below the rate of inflation of 2.8 percent, a move Mr Osborne and Duncan Smith said would save taxpayers 2 billion pounds (S$3.8 billion) a year.

Also included are a welfare benefits cap, a reduction in benefits towards paying council tax, and, controversially, a measure dubbed a "bedroom tax" by Britain's media.

The government sees the plan, in which welfare payments are reduced to households deemed to have more rooms than they require, as the abolition of a "bedroom subsidy".

Defending the move on Sunday, Conservative chairman Grant Shapps said even his children shared a bedroom, but he was later ridiculed on social media after reports emerged that the millionaire lawmaker has one room set aside as a study.

The opposition Labour party said families would on average be 891 pounds worse off a year as the result of tax and benefit changes introduced since 2010.

"This is the week when the whole country will see whose side (Prime Minister) David Cameron and George Osborne are really on and who is paying the price for their economic failure," Labour finance spokesman Ed Balls said in a statement.

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