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
    +5

    Comment number 269.

    Post 197 "I have never seen Blackberry or Armani put something back into estate communities who bought all stuff in first place and kept poor"

    For God's sake take some responsibility for your own actions. You can't buy high value luxury products and then complain that these companies have kept you poor.

  • rate this
    +1

    Comment number 268.

    Its not the first time that we have had a limit on benefits payments for the size of a family sounds like a good idea to me, one thing that does sound crazy though is the idea of giving up workers rights for shares, that just sounds stupid to me and I am a Tory voter, you will have to do a lot better than that george, try building more homes and fixing the roads.

  • rate this
    +6

    Comment number 267.

    Not everyone is fortunate enough to leech off of Daddy's wealth, George

  • rate this
    +4

    Comment number 266.

    re. suspension of housing benefit for young people without jobs. So what has happened to the old "Get on your bike and look for work!" How are young people supposed to find work if their parents live in a small village in the country? Also what happens to those who have spent life in care or whose parents have thrown them out (or simply died).

  • rate this
    0

    Comment number 265.

    @237 Chad

    "...an independent report.."
    Oh yes, an independent report by Gideon? If not, please tell us where we can read it.

  • rate this
    +2

    Comment number 264.

    To glass is half full (comment 192).
    My wife is in her late 50's and has had the date at which she receives her pension cut first by Labour and then again by the Coalition.
    They have stolen tens of thousands from her and other women of a similar age, so don't you DARE suggest that pensioners should have even more STOLEN from them !!!

  • rate this
    +1

    Comment number 263.

    Every day these elitists are in power, this country gets worse. And while the people of this country sit idly back and allow it all to happen, it is all our fault. We need to take our country back from these corrupt, evil men, who are systematically raping and robbing every vulnerable and disadvantaged group of people. If nobody can be bothered to fight then the people of this country deserve hell

  • rate this
    +2

    Comment number 262.

    you have to love Osbourne's logic:

    Everyone will want to work here if they can sack you at the drop of a hat

    Except if it doesnt work the companies already here can just sack you anyway.

    Who put him in charge?

  • rate this
    +1

    Comment number 261.

    People really do have short term memory issues...
    Hospital Light Bulb £10, School Door Handle £300
    Feckless Labour Government PFI .... "Priceless"

  • rate this
    +5

    Comment number 260.

    So, sign away your rights and get some shares instead upfront. Then if the economy doesn't improve and your firm makes you redundant, join the rest of the redundant workers trying to sell those shares - Ooophs, what a surprise - the shares are suddenly worthless, and so, in Tory eyes, will you be.
    Workhouse, anyone?

  • rate this
    +1

    Comment number 259.

    #225, johnnybgoode83. The Condems ARE keen on tax collection!
    HMRC are about to employ ONE HUNDRED more taxmen!!!!
    Unfortunately, they've already sacked 1,500 of 'em.

  • rate this
    +1

    Comment number 258.

    The amount paid in pensions to retired police and armed forces should also be reduced.They are paid far to much and retire far to early.
    The increase in retirement age for the majority is morally unfair,and losing out on basic pension is no more than theft.

  • rate this
    +3

    Comment number 257.

    LibDems - PLEASE RESIGN NOW so we can have a general election and get the Conservatives PROPERLY back in power.

    Or shall I just have 20 kids and sponge off the rest of you .....

    The "Revolution" will not be against the Government but will be a CIVIL WAR between those that expect everything on a plate "as their right" and those that work hard, pay their taxes and don't expect handouts.

  • rate this
    +2

    Comment number 256.

    George Osborne is right to target child benefits. There should be a limit on the number of children in a family getting benefits. I would put the maximum at 2. It is a disgrace that people have a large number of kids to get the allowances and drain the state as expressed by Daryll.Couples should weigh up the cost of having kids and only have what they can afford. Benefits should not replace work.

  • rate this
    +5

    Comment number 255.

    Should we not be giving more to those who suddenly find themselves with problems, redundancy, poor health etc, and giving less to those who make it a career choice ?

  • rate this
    +3

    Comment number 254.

    I'm afraid that financial reality seems to have evaded the majority of the public. Outrage at a smal reduction in the size of the state shows that.

    Labour will win the next election based on economic fairytales.

    The B.o.E. will continue to print money for the facade to continue for a while after that.

    Long term - The country is screwed.

  • rate this
    -1

    Comment number 253.

    The trouble with this government and the last to a degree is they do not realise the consequences of their actions If they are spending too much on benefit get the economy going and get some jobs increase the minimum wage so as they can afford to pay a resonable rent

  • rate this
    +2

    Comment number 252.

    I could never understand why our government always promotes "baby farms".

    Living your life on welfare income, with the sole aim at procreation, in an over-populated world is, in my view, unjust and plainly wrong!

    The taxpayer should not be forced to pay the bill for such a choice.

    Accordingly, certain welfare cuts, including child benefit cuts, and/or limitations, should be implemented, now.

  • rate this
    +2

    Comment number 251.

    There are many problems in our society, created and perpetuated by governments past and present. What is urgently needed is a severe dose of fairness and not this constant war, ratcheted up by the Tories, on the welfare state. Take away what little money these people have and where does that leave them? A life of poverty, crime, starving kids. Stop papering over the cracks and target the causes.

  • rate this
    +3

    Comment number 250.

    Taget benefit reduction certainly; set a limit on the number of children eligble for child benefits, why not. But also slash the overseas aid budget by 90%, reduce the number of MP's and members of the House of Lords to no more than 300 in total, and go after every FTSE 300 company for their outstanding back taxes, setting a limit of 18 months to achieve.
    Too much talk not enough action.

 

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