Tory conference: George Osborne in £10bn benefit cut vow

 

George Osborne on tax rates 'for the very richest', the 50p tax rate and cap on benefits

The government is determined to cut a further £10bn from the benefits budget to fight the deficit, Chancellor George Osborne has told the Tory conference.

One idea he suggested was limiting the number of children in a family that should be supported on benefits.

He said the better-off would pay more in taxes, but the budget could not be balanced "on the wallets of the rich".

He also unveiled a plan for workers to give up a string of employment rights in return for shares in their employer.

The new owner-employee contract allows owners to award shares worth up to £50,000 to their staff, in return for the employee giving up their unfair dismissal, redundancy and training rights and also the right to ask for flexible working.

He said there would be no capital gains tax on the profits from the shares, so it would be "owners, workers and the taxman all in it together".

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The difficult reality for Mr Osborne is that the coalition has been struggling to deliver on the two goals that were right at the centre of its economic strategy”

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Mr Osborne's speech comes with the UK economy in recession, hitting the government's tax takings and its plans to reduce the deficit (the difference between the amount spent by government and the amount it receives from tax etc).

In his speech in Birmingham, the chancellor made clear he was not planning to change course and said a further £16bn of savings must be found by 2015/16 to meet his target of balancing the budget within five years.

This, he said, would include cutting £10bn more from the welfare bill by 2016-17, on top of the £18bn announced in 2010.

Mr Osborne said: "Let the message from this conference be clear: we will finish the job we have started."

'Large bill'

He told party members that "the economy is healing" but added that "healing is taking longer than we hoped, because the damage was greater than we feared".

Mr Osborne spelt out ideas for cutting the welfare bill, such as limiting housing benefit for the under-25s, so that young people without a job have to live at home; possible further curbs on child tax credits; and allowing benefit increases to be lower than the rate of inflation.

Comparison of welfare savings with the expected size of welfare programmes in 2017

Deputy Prime Minister Nick Clegg told his own party's conference last month that he would not allow "wild suggestions" of a £10bn cut in welfare and Chief Secretary to the Treasury Danny Alexander told delegates: "We simply will not allow the books to be balanced in a way that hits the poorest hardest."

The Lib Dems advocate a "mansion tax", under which owners of homes worth more than £2m would pay a 1% annual charge on property values above that level.

Mr Osborne ruled out such a measure, which is unpopular among Conservative MPs, saying: "It would be sold as a mansion tax, but once the tax inspector has been let in the door, we would soon find most homes in the country incur a mansion tax.

"It's not a mansion tax but a homes tax, and this party of homeowners will have no truck with it."

But he said taxes for the most well-off would be increased in some form in the next few years, so that those "with the broadest shoulders" paid most.

However, he said: "Just as we should never balance the budget on the backs of the poor, it's a delusion to say we can balance it on the wallets of the rich."

Universities money

BBC political editor Nick Robinson said the comments by Mr Osborne and senior Lib Dems amounted to "haggling in public" over the size of tax rises and welfare cuts.

Mr Osborne presented a united front with Work and Pensions Secretary Iain Duncan Smith, following reports the Treasury wanted to scrap the work and pensions secretary's new Universal Credit over fears costs and complexity were spiralling out of control.

Mr Duncan Smith is understood to have initially resisted the welfare cuts proposal, arguing savings should be found by means-testing benefits such as free bus passes and winter fuel payments for better-off pensioners.

WELFARE SPENDING

  • The Office for Budget Responsibility forecasts that the government will spend £209.2bn on social security benefits and tax credits during this financial year
  • This figure is predicted to increase to £229bn by 2016/17
  • Total government spending is expected to rise from £683.4bn to £756.3bn during the same period
  • In 2010 the government announced welfare cuts of £18bn a year by 2014/15 -
  • George Osborne wants to see £10bn welfare cuts over two years 2015-2017

In his speech, Mr Osborne accused Ed Miliband of lacking an alternative economy strategy, claiming the Labour leader did not mention the budget deficit once in his Labour conference speech last week.

He also announced an extra £200m in government funding for scientific research in English universities and restated his belief in the future possibilities of shale gas.

The Research Partnership Investment Fund was launched with £100m of government funding by Mr Osborne in his March Budget.

Universities must match any public money with at least double the amount of cash from the private sector or charities, which the government claims could add up to a total investment in research of more than £1bn.

The Conservatives began their annual conference with policy announcements aimed at easing the cost of living as they attempt to show they are on the side of hard-pressed families.

These include extending the council tax freeze in England for the third year in a succession and capping some rail fare increases to inflation plus 1%.

David Cameron also said he would be prepared to veto a new EU budget to prevent "massive" increases.

 

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  • rate this
    +2

    Comment number 69.

    53. Bullitjw
    "Brilliant, it's about time we butchered the welfare state,I am a huge supporter of the welfare state in essance"

    Clearly you're not, or you would never consider 'butchering' the state to be a good thing.

    I actually agree that some of these changes should be made to deter overpopulation, but the constant vilification of the unemployed is bordering on villainous itself.

  • rate this
    -1

    Comment number 68.

    Get ready for the usual outranged rants from Labours' client vote.
    Those that think money grows on trees. Those that think £4.5tn of debt (including off-balance sheet liabilities like PFI) is an irrelevance.

    The size of the state has grown out of all proportion. It provides disincentives where there should be incentives and incentives where there should be disincentives.

  • rate this
    0

    Comment number 67.

    Start by getting all those unpaid taxes and benefits to MP's before going after the general populace. Don't disagree that we have too many people and need to cut back but there are other areas to look at that would bring in more money

  • rate this
    +1

    Comment number 66.

    So...income tax cuts for the rich but no new taxes on wealth and a promise of a £10 billion cuts for those most in need.

    He may as well have said ''you are all in it together...I'm alright Jack''

    Nasty Tories back with a vengeance - Thatchers children at their worst.

  • rate this
    +4

    Comment number 65.

    16.HaveIGotThatWrong

    Okay, so the other options are we call pay more in tax (not very popular), or we cut public spending (again, not popular) or we borrow more (which is Labour's preferred option).
    ----------------------------
    I think you'll find the popular option is "everybody else should pay more tax".

  • rate this
    -2

    Comment number 64.

    Why is it that people and i mean (all people) cannot see what is going on?This has been on the cards even before they came into power!The Conservatives/Libdem Coalition should

  • rate this
    +5

    Comment number 63.

    George Osbourne - Wiki Entry.

    "Osborne's first job was entering the names of people who had died in London into a National Health Service computer.[13] He also briefly worked for Selfridges, re-folding towels.[13] He originally intended to pursue a career in journalism, but instead got a job at Conservative Central Office.[13]"
    He has never worked in Business so hown can he honestly manage money!

  • Comment number 62.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +7

    Comment number 61.

    Blah blah blah...poor.

    Blah blah blah...rich.

    What about the rest of us?

  • rate this
    +2

    Comment number 60.

    More slash and burn economics from Osborne. "The first lot didn't work, so we obviously weren't trying hard enough".

  • rate this
    +7

    Comment number 59.

    As always the rich cause the mess,without sanction,and the poor pay for it.How long,I wonder,will the majority of the population be kept subdued by Eastenders & cheap supermarket alcohol?Politicians need to stop blaming the poorest parts of society for the excesses of greedy bankers & inept Government.It's a nazi tactic & distasteful in the extreme.Punish the wrongdoers,not the unfortunate.

  • rate this
    +4

    Comment number 58.

    People who live in £2m+ mansions are supposed to be able to afford £20k+ per year in tax? Ridiculous. No wonder he turned it down, but of course he's a Tory and is out for himself and his Eaton friends right?

  • rate this
    +2

    Comment number 57.

    Why is the government so foolish, Be bold and stop with immediate effect this absolute ridiculousness of Child Benefit. The State should not be paying towards any child, end of debate. Considering the gov has been in situ for so long only in 2013 will some positive changes start being introduced. End of no council tax if on benefit, all will contribute. Now that's universal.

  • rate this
    +4

    Comment number 56.

    europe is killing the uk...get out now and save 350 mill a day, and give the young people of the uk a chance....

  • rate this
    +4

    Comment number 55.

    This man is a complete idiot what's the point in debating what he says. His "policies" fail time and time again. The real solutions never get discussed by any of the three parties, or mentioned by BBC.

    The country needs to stop paying the private central banks and create the money it needs to build infrastructure and create jobs. The debt is fiat currency, i.e. it has no real vaue.

  • rate this
    +8

    Comment number 54.

    At last - about time my hard earned taxes were spent on a more worthy cause rather than those people who have loads of kids becasue thats all they know what to do and have no intention of going out to find a job. They want to try getting up at 5.00am and going to work.

  • rate this
    +3

    Comment number 53.

    Brilliant, it's about time we butchered the welfare state,I am a huge supporter of the welfare state in essance, but it has become a safe haven for the lazy in society.
    I am fed up of going to work then hearing rampant breaders who have never worked a day in their life complaining that they don't get enough. If your only achievment is procreation without means of support, hell mend you

  • rate this
    +112

    Comment number 52.

    This should be very simple excercise...
    In the last ONS audit of HMRC there was £25.5 Billion of outstanding tax
    owed to HMRC... Stop procrastinating and kick the HMRC into action.

    This should be a priority, this is not cutting anything, it is recovery.
    Please do this imeadiately.. If not sooner

  • rate this
    +1

    Comment number 51.

  • rate this
    +1

    Comment number 50.

    On a recent Question Time programme one of the panelists stated that the rioting seen else where in europe would not happen here.......Think that statement may need a 'U' turn.

 

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