He confirms that 490,000 public sector jobs would be lost over the next four years
George Osborne has announced a £7 billion hit on the welfare budget as he took an axe to public spending as part of a four-year plan of cuts which he said would drag the country "back from the brink".
The Chancellor said that departments across Whitehall would face swingeing cuts over the next four years as the Government acted to pull the country back "from the brink of bankruptcy".
Delivering the comprehensive spending review, he told the Commons that raising of the state pension age to 66 would be brought forward to 2020, saving £5 billion a year.
The welfare cuts - on top of the £11 billion announced in the emergency Budget in June - include the axing of child benefit for higher rate taxpayers unveiled at the Conservative Party Conference in Birmingham. However, he finally scotched speculation that he was planning to cut child benefit for children over 16.
Mr Osborne described the package as "tough but fair".
"Today's the day when Britain steps back from the brink, when we confront the bills from a decade of debt," he said. "To back down now and abandon our plans would be the road to economic ruin. We will stick to the course. We will secure our country's stability. We will not take Britain back to the brink of bankruptcy."
On the job losses that will result, Mr Osborne confirmed that the Office for Budget Responsibility had estimated that 490,000 could go over the four years.
But he sought to reassure the public, saying: "Much of it will be achieved through natural turnover, by leaving posts unfilled as they become vacant. Estimates suggest a turnover rate of over 8% in the public sector. But yes, there will be some redundancies ... that is unavoidable when the country has run out of money".
Mr Osborne pledged to maintain universal benefits for pensioners including free eye tests, prescription charges, bus passes, TV licences for the over 75s and winter fuel payments. Mr Osborne confirmed the cuts would mean that an estimated 490,000 public sector jobs would be lost over the next four years, while £1.8 billion will be cut from public sector pensions.
The Chancellor taunted Labour, saying departments whose budgets were not protected would see average cuts of 19% over the four years, compared to 20% implied by the previous government's plans.
By The Press Association