Low-paid British workers brace for more austerity

Money was already tight for single mother Nicola Marshall and looks set to get tighter in a new austerity drive in Britain that will affect millions of low-paid workers.

"There's going to be people out there who simply don't have money to spare," said the 37-year-old part-time office worker, who relies on tax credits to top up her £11,000 (15,000 euro, $17,000) a year salary.

Britain is slashing the credits, which currently help 4.5 million households, in a drive to reduce welfare dependency that has prompting warnings the cuts would hit the poor -- and could be counterproductive.

The measures form the core of £12 billion of welfare savings over the next five years as Prime Minister David Cameron's newly-elected Conservative government seeks to eliminate a budget deficit.

Reducing tax credits and restricting them to two children will cut £6 billion from a system that costs £30 billion a year, something finance minister George Osborne said was "simply not sustainable".

Unveiling his budget on Wednesday, Osborne told the House of Commons that tax credits were "subsidising lower wages".

To offset the change, he announced the introduction of a higher minimum wage for the over 25s and income tax cuts for the lowest earners, promising to "make work pay".

Analysts warned however that these measures would not mitigate the benefit cuts, prompting charities to warn the poorest could see their incomes slashed.

"In practical terms it means families forced to choose between paying the bills or missing meals," said Nick Bryer, head of UK policy and campaigns for Oxfam.

The changes were hailed by Conservative lawmakers, and the mass-selling Daily Mail tabloid said it was a bold assault on Britain's "bloated" welfare system.

"It was nothing less than a blueprint for transforming Britain into a better, more prosperous country -- of self-reliant families, rescued from welfare dependency to enjoy the dignity and rewards of work," it said.