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
    -7

    Comment number 369.

    The "poor"/jobless are always the hardest hit, from the alcohol tax, cigarette tax and no benefits for having lots of children.

    What next? A tax on Sky TV?

  • rate this
    +7

    Comment number 368.

    Once again... The poor and struggling get a kicking in tough, tough times. This will make more money for the treasury but kills growth even more than it was killed before. What a plastic, fake, smug lo this is, CALL AN ELECTION NOW!!!!!

  • rate this
    -2

    Comment number 367.

    293.
    thetropicalfish


    - Get preggers and they give you a council house./////

    - When you and your wife/husband 'get preggers', I only hope you don't accept the Child Benefit I pay for out of my taxes!

    - On the point of Taxes and Tax dodgers, how much have the BBC avoided paying and do we finally have an explanation for the moderators censoring anti-govt sentiments this past couple of years?

  • rate this
    +4

    Comment number 366.

    Nothing has changed since the 19th century Big business profiteering from the poor.
    The wealth that Cameron talks about from business is NOT for the people it's for the rich...UK is the only country in Europe that has NO real work or social policy for the people. That is why the conservatives want us out...Look at the Sun it doesn't accept unions WHY?

  • rate this
    +6

    Comment number 365.

    Build top-notch council houses and we'll lift the poorest out of fuel poverty, boost housing, and bypass greedy landlords and power companies who get overpriced state handouts to badly retrofit unfit housing. Oh, and bring the armed forces into line with other EU countries who accept their place in this post-colonial world and don't feel they need to invade/arm/disarm somewhere every 20 years.

  • rate this
    +1

    Comment number 364.

    The Tories need to do welfare reform, no doubt, but they need to balance it alot fairer across the demographic spectrum.

    To says we're cutting benefits but won't introduce a wealth/mansion tax is basically saying "we want to lose the next election".

    The rich have a card to play "we'll move and take your jobs with us" the poor don't have a card to play. .

  • rate this
    +25

    Comment number 363.

    Why should my rights as as worker be eroded to pay for the mess that the bankers and poor leadership have created?
    You just try it Osbourne.. I dare you, you have seen absolutely nothing of the civil disobediance that will follow... I'll quit my job and hound you full time!

  • rate this
    +5

    Comment number 362.

    Isn't it interesting how, every time this "tax the rich, don't tax the rich, cut the benefits" merry-go-round goes on, the politicians skillfully avoid the ...erm... avoidance issue. The swiss-cheese style tax laws in this country are ripe for the picking. But they're managing to turn a blind eye to it again. Wonder why.

  • rate this
    +5

    Comment number 361.

    Why are they still beating around the bush? Come on Tories, grow a pair and do what you were born to do.

    Build a giant incinerator to burn those pesky scrounging poor, then you can directly heat the homes of your rich chums with misery and suffering.

    You may as well, you know you want to.

  • rate this
    -6

    Comment number 360.

    RE: Number 45 disgustedTW. Are you referring to the same minority who pay the vast majority of taxes (top 1% pay 37% of income tax). And do you refer to the same party that is making huge efforts to cut down on tax avoidance which was allowed to escalate under Labour? Are you entrenched in your perception of the conservative party? Would this make you a bigot?

  • rate this
    +5

    Comment number 359.

    I have 5 children myself with my husband who woks 6 days a week to support my family on a low wage so we do claim working tax and child tax credit. How about making easier for people to get better jobs by subsidising fees to higher education. How are people going to get better jobs when it is made costly to study to get a better job?

  • rate this
    +3

    Comment number 358.

    Now we know where he expects to get the money he uses to subsidise the theiving banks!

  • rate this
    +3

    Comment number 357.

    Cutting Benefits will not help the economy, and as such it will not reduce the deficit.
    The Economy is not strengthened by increasing the income divide. All that will result from this, will be a drop in consumer spending, which in turn will cause companies within the economy to reduce output. This will result in more job cuts, and less tax revenue, which in turn will lead to more borrowing.

  • rate this
    +2

    Comment number 356.

    Why can't we give people on benefits vouchers instead of cash? These vouchers could be used to purchase essentials such as food, gas, electric and water,My wife and I work Monday to Friday 35 hour weeks, on our very estate their are families who 'choose' to claim benefits rather than work and lead much better lifestyles than ourselves, drinking, smoking, wide screen televisions and Sky TV

  • rate this
    +1

    Comment number 355.

    Here we go again, I am glad most of the people posting here are not running the country.

    All we hear is tax the wealthy, tax the millionaires!

    The wealthy already pay the majority of tax so stop bleating about it.

    I am glad the Tories are adressing the massive benefits bill, taking benefits must cease to be a lifestyle option for people who just don't want to work.

    More politics of envy!

  • rate this
    +7

    Comment number 354.

    Benefits (apart from disability) are a milstone around our neck. The feckless workshy were pandered to .

    Benefits should never, ever in anyway give more than working. They should have been slashed year ago; at least we can now start moving on cutting the benefits and making the feckless realise you need to work to live. They've had it easy for too long riding off the back of the tax payer.

  • rate this
    +3

    Comment number 353.

    "in return for the employee giving up their unfair dismissal, redundancy and training rights and also the right to ask for flexible working."

    Ridiculous! Taking away stability will improve recovery? What planet is this man on?

  • rate this
    +3

    Comment number 352.

    I wish they'd quit dithering and cut deeper. Now is not the time for populist politics.

  • rate this
    0

    Comment number 351.

    Have no problem trimming welfare budget to serve need & encourage folk to stand on their own feet But living wage jobs are scarce what do they do?The rich must pay more?All the evidence so far is their tax burden has reduced while middle ground increased.Nothing been done to recover huge amounts of due tax.I would be more sympathetic if we saw more action to tax the rich but we wont, for certain.

  • rate this
    +3

    Comment number 350.

    @181 completely agree but the MP's are probably at it themselves with turning a blind eye to tax avoidance; shame they couldn't launch an incentive to shop a tax avoider like they have with shop a benefit cheat.....

 

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