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 349.

    At last some sensible politics. Family sizes shouldn't be indicative of benefit amounts. Sure raise some taxes but if we need to get out of the mess we're in, there will have to be some controversial policies.

    At least this party is coming up with some ideas; I saw nothing coming from either of the other major parties.

  • rate this
    +3

    Comment number 348.

    I don't think those calling for more benefit cuts have ever been on benefit. There may be some people unwilling to work but such high unemployment means that people wanting to work will barely able to make ends meet. Through illness I was unemployed for 18 months 7 years ago and nearly lost everything. More taking from the poor and the disabled. Shame on you Osbourne. Typical callous Tory

  • rate this
    +7

    Comment number 347.

    Osbourne is using the economic crisis to drive through ideologically motivated policies. There is clear need to tackle welfare dependency and benefits culture, but this is not going to do that effectively and is playing to the Daily Mail reading gallery.

  • rate this
    +6

    Comment number 346.

    Just give us a chance to live Mr Osborne PLEASE !!!!!!! . My family and i can barely survive at the moment and live hand to mouth every month. We are hard working, tax paying decent people with good kids but you are financially killing us. WE CAN'T CONTINUE TO SURVIVE WITH YOU CONSTANTLY STICKING THE BOOT IN !!!!!!!.

  • rate this
    +8

    Comment number 345.

    would it not be better to make minimum wage higher as in incentive for people to work? currently the minimum wage is a lot lower than living expensives & most of the benefit go on this. I also agree pensions & everything that goes with it free bus passes & winter allowance should be means tested & shouldn't go to older people if they have a lot of money

  • rate this
    0

    Comment number 344.

    ###330 he is one for the casino in london

  • rate this
    -2

    Comment number 343.

    The UK is like a giant Tanker, you cannot make a you turn immediately, unfortunately we are all paying the price for poor policies and lack of backbone when it comes to the EU. The EU has destroyed this country, to many Brussels policies interfering with voters own views. So stop blaming every party and start shouting to leave the EU. We don't need them, we can join the WTO instead.

  • rate this
    +1

    Comment number 342.

    Rich pay to find ways to stop them paying so won't pay, the poor can't pay (but frequently end up having to), the idle will do all they can so they never pay (and we all sit back and watch them doing it, we're too nice to report them & be unpopular) so it's down to us the mugs as usual to have to compensate.Sort out the scroungers and make them work on community projects to 'earn their crust'

  • rate this
    +6

    Comment number 341.

    Swap the term 'benefits claimants' for 'jews' and re-read the rhetoric from this government.

    Divide and rule might be a wheeze of a topic in the debating chambers of Eton but it's a really nasty policy when applied to real lives. Yes there are those who abuse the system but they're not the reason, nor the solution, for the current economic crisis. The ruling classes are the problem.

  • rate this
    +24

    Comment number 340.

    Is Osbourne mental? I know a lot of people who started their careers in the early 90's on low salaries in exchange for company shares which 10-15 years later turned out to be worthless even though the companies were successful. No Osbourne wants to extend the rights of employers to scam their employees even further? Nice one George!

  • rate this
    +6

    Comment number 339.

    Cutting benefits removes money from the economy. Regardless of where you sit on the political spectrum, if you cut the amount of money in people's pockets, particularly those who spend money on a daily basis, you'll be cutting demand and keeping us in recession. Tax cuts for the wealthy (who don't have to spend) at the expense of benefit cuts (for those who must spend) is economic madness.

  • rate this
    +3

    Comment number 338.

    #293 I know someone who got a council house in this way, I'm sure they got pregnant for this very reason and they have only just turned 18. £1800 grant to furnish it too...While everyone is paying more tax, others are still being a burden on the rest of us...families should support their children in cases like these and stop this idea that the government will always bail them out.

  • rate this
    +3

    Comment number 337.

    190.garymt
    Couldn't agree more. Shares are very definitely a gamble and not something to be gambling what you can't afford to lose on.

  • rate this
    +5

    Comment number 336.

    The British Government have been sponging of me and my wife for years. They've dipped into our wage packet month after month without asking and they have never ever said thanks for our contribution to society. Now because its suits them they want to take away the right to benefit should we have the misfortune to become unemployed or sick. Shameful

  • rate this
    +5

    Comment number 335.

    "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."


    Can someone please explain to me how most homes in the UK are worth £2 million (the proposed level above which a home is classed as a mansion)? Is Osborne out of touch with reality, unable to do basic maths, or can he not read?

  • rate this
    +2

    Comment number 334.

    Does the figure of £209bn include disability and pensions?

  • rate this
    +4

    Comment number 333.

    @HaveIGotThatWrong
    Yes you have. There are more options that the government has not seen fit to follow through with. While you people see this as a simple war between those who are wealthy and those who are not, the simple solutions that the country has in front of its nose will go by the board. Why not give people the jobs they need by awarding UK contracts to UK firms? Not rocket science

  • rate this
    +2

    Comment number 332.

    Why do we have to make further cuts in social services? The defence budget is awash with unneeded capital spending (aircraft carriers, for example); and bringing the troops home from Afghanistan NOW, then slashing the huge numbers in the army, navy airforce would not only save money but would prevent such unwise excursions in the future. We should look at ALL spending to make cuts.

  • rate this
    +2

    Comment number 331.

    Crime in this country costs around £35 billion p.a. yet the ability to tackle it is reduced. Still, let's not complicate things eh! Wouldn't want Mr Osborne to get a guilt complex.

  • rate this
    +8

    Comment number 330.

    The influx of 'wealth generating influxers' is fluxing the country to death. Osbought is too thick to be employed as a bookies runner.
    We are up that famous creek, without a paddle, and not even a kayak to do an insurance fraud.

 

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