GEORGE Osborne today (July 11) rejected growing criticisms from the Archbishop of Canterbury, denying his policies were hurting the poor and the North.

Quizzed by The Northern Echo at Westminster, the Chancellor insisted controversial benefit cuts were helping people who were currently “trapped in poverty”.

And he mounted a strong defence of the fairness of Government spending, saying: “We are making a determined effort to invest in the economic infrastructure of the North.”

In recent days, the Most Rev Justin Welby - the former Bishop of Durham – has made a series of criticisms of Government policies, seen by some as interfering in politics.

First, the Archbishop turned on Conservative ministers for dividing the nation into “strivers” and “scroungers” who were on benefits, saying: “That's clearly completely untrue.”

He accused Lord Freud, the welfare reform minister of getting his facts wrong after he suggested the squeeze on benefits was not responsible for the growth in emergency food aid.

A Church of England analysis, in County Durham, found that 35 per cent of people using food banks were referred by social services, because their benefits had not been paid.

Archbishop Welby also condemned the huge difference in Government infrastructure spending - at more than £2,000 per head in the South East and just £5 per head in the North-East.

He said: “We all know that there is a gross imbalance in the allocation of resources.”

The Archbishop also raised eyebrows by suggesting the Treasury planned higher inflation to cut Britain's heavy debt burden - despite it being the “worst tax on the poor”.

Mr Osborne insisted he was relaxed about the interventions from Lambeth Palace, saying: “The Archbishop is entitled to speak about whatever he likes.”

He defended benefit cuts, saying: “The Archbishop himself acknowledged that the reforms will help incentivise work and the welfare system, as presently constructed, traps people in poverty.

And he added: “On the North-South divide, I represent a seat in the North West of England. We are making those investments of the North and we will see the benefits.

“You can see that not only in projects like Trans Pennine electrification and the Northern Hub, but also HS2.

“I know HS2 is controversial, but I think it will have a huge impact on the economic geography of this country. It’s a massive multi-billion investment in the North and the Midlands.”

The Chancellor also pointed to “encouraging private sector job growth in the North-East and Yorkshire”, saying: “That points to a sustainable approach for our country.”

During a lunch with journalists, Mr Osborne confirmed he would announce a tax break for married couples – expected to be worth £150-a-year – in the autumn.

And he argued the Government was now decisively winning the economic argument, with Labour “entirely absent from the field of battle”.