Osborne reveals ‘living wage’ – and benefits cuts

Hailing a new “higher wage, lower tax, lower welfare” Britain, the Chancellor said from next April everyone over 25 would be entitled to £7.20 an hour – and the figure would rise to £9 by 2020.

Unions have long campaigned for the living wage – paid by some councils including Preston – to become the norm rather than the national minimum wage.

Some six million people will see their pay increase as a result - and those currently earning the minimum wage of £6.50 an hour will be £5,000 better off by 2020, he claimed.

Mr Osborne said he was following the Conservative tradition as the party that brought in protections for mill workers during the industrial revolution.

“Taken together with all the welfare savings and the tax cuts in this Budget, it means that a typical family where someone is working full-time on the minimum wage will be better off,” Mr Osborne told MPs.

But acting Labour leader Harriet Harman responded by claiming the Budget was “making working people worse off” by cutting tax credits for the low paid and grants for students from poorer backgrounds.