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
    +6

    Comment number 129.

    Laughable. If only he was as dogged about tax evasion for him and his rich cronies. None of the super rich pays anywhere near the top rate of tax! They can afford expensive accountants to ensure they pay less than any of the Oiks on here applauding him. What will happen if they manage to get these so called scroungers off benefits? Who will you have to sneer at!! they don't care about you!!!!!!!

  • rate this
    +4

    Comment number 128.

    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.

    Why does this idiot bother to say anything when he knows that he is just a puppet of the Tories.

    Start voting against their extreme right wing policies and then there is just a chance that the Lib Dems will not get wiped out at the next election.

  • rate this
    +5

    Comment number 127.

    children are optional, taxes aren't....why should everyone have to pay for people who can't practice some form of self restraint ....especially those youngsters who know more about sex than most older people and get pregnant deliberately so they don't have to work...and we all know it happens. If you lose your job & have kids thats different but too many use pregnancy to get out of working.

  • Comment number 126.

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

  • rate this
    0

    Comment number 125.

    We should only pay benefits for 18 months and then only if you have paid in. This something for nothing lunacy has to stop. Benefit "lifers" need to be looked at under a microscope.

  • rate this
    +4

    Comment number 124.

    Suffering from chronic illness that the NHS said won't get better, have firms that want to employ me but 3 hours a day 2 days a week made me considerably worse. Whilst ill created work for over 12 UK businesses and helped thousands of elderly, sick & disabled. Been on every course offered by the jobcentre but my condition won't co-operate, if NHS can't help me how can private company say I'm fit?

  • rate this
    +13

    Comment number 123.

    They're not even disguising it any more. The Tory party hasn't and can't change it's spots. It is the party of wealth and privilege. Their policies are motivated by protecting the wealthy individuals who make up and support their party, imposing financial burden on the poorest in this society. They are absolutely shameless.

  • rate this
    -4

    Comment number 122.

    @84 well said plus sort out the benefit cheats and see how much money which would be saved !!!!!!

  • rate this
    +8

    Comment number 121.

    Maybe if company owners didn't export all jobs to Asia there would be more jobs to go around? Q.E.D

  • rate this
    +21

    Comment number 120.

    To claim we are all still "in this together" is an insult to our intelligence.

  • rate this
    -1

    Comment number 119.

    Remember this story from February about a family on benefits? http://www.bbc.co.uk/news/uk-16812185
    It generated over 1,200 comments; the vast majority of which were complaining about the generosity of benefits claimed by feckless families with hoards of feral kids. Finally it looks as if something IS going to be done to cut back this wasteful welfare spending. More power to you Mr Osborne.

  • rate this
    +56

    Comment number 118.

    Fact 5% of benefit claimants are fraud, fact, thousands of benefit claimants want to be in work, Fact there are not, repeat not enough jobs out there.
    disabled people are having benefits stopped and declared fit to work, where???
    now under 25's are going to lose housing benefit forcing them to sleep rough and a rise in crime, next pensions will be cut leading to rising deaths in the elderly.

  • rate this
    +11

    Comment number 117.

    13.Andy 1

    Your 40% goes towards schools, hospitals, roads and the other things you need to earn the other 60%.

    Only a small fraction goes on benefits and only a small fraction of that goes to "scroungers".

  • rate this
    -4

    Comment number 116.

    Gavin - 1 Minute Ago - idiot.

    Yes he is (for different reasons), but so is anyone who thinks that this Country should be paying £200bn a year in benefits and tax credits. In a population of 60million are there really that many needy people out there? Think not, and the alternative? A Labour govt which thinks ony the super rich should work and pay taxes.

  • Comment number 115.

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

  • rate this
    +3

    Comment number 114.

    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.

    yer george some time but not as quick as the poorest pay.can we have the broadest shoulders now if you dont mind.

  • rate this
    +3

    Comment number 113.

    If you are intent on cutting the welfare budget by so much, then you have to start looking at pensioners, which is not going to happen as grey vote is so precious. Winter fuel only to those that need it. Today's pensioners have never had it so good, and have a lifestyle those of us retiring in the future can only dream of. Majority would accept this - more working age than pensioner poverty now.

  • rate this
    0

    Comment number 112.

    A serious clampdown on benefit fraud with stiff penalties might help.

    Also, we have to accept that there is not a bottomless pit of money to fund benefits, so some cuts are probably necessary.

    The problem is that there is no simple answer that is fair to all - any changes to the tax and/or benefit systems will always result in winners and losers.

    Does anyone really have the answer?

  • rate this
    +4

    Comment number 111.

    The benefit system is meant to be a safety net for those that CANT work ... not as an income replacement system for those that WONT ...

  • rate this
    +5

    Comment number 110.

    It's 2030!

    Welcome to the United Kingdom, our new 51st state!

    Please leave any notion of welfare and free heathcare at the border and be prepared for a very long and invasive body search!

    No poor, or sick, or unemployed!

 

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