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.


  • 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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  • Comment number 389.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 388.

    Unless you are genuinely too ill to work , benefits should still be worked for. I'll bet all of us wherever we live can see lots of things that need doing in our towns that people receiving benefits should and could be doing. The hand out culture must end and if it dosent we'll all be the losers in the long run for sure...

  • rate this

    Comment number 387.

    Families should not have children if they cannot afford them.
    People should not assume that they are going to be handed welfare as a matter of course or as a basic human right
    Only the Labour party could twist the meaning of words 'fair' and 'privileged' and 'disadvantaged'

  • rate this

    Comment number 386.

    I can find 10 Billion, Internation Development Budget (AID), no one has expained why whe have to speand so much, Politicians vanity?

    When we have cleared the deficit, then give some away, not when we havent got it.

    Is like we are not allowed to talk about it.

  • rate this

    Comment number 385.

    HB should have been capped decades ago. Those who make the personal lifestyle decision to over-populate an over-congested, resource-drained little island with children they're unable to afford can't treat responsible, childless taxpayers as limitless cash cows who always pick up the bills.

    This is why we NEED a Nasty Party to make the right decisions that are both fair and practical for ALL of us

  • rate this

    Comment number 384.

    The biggest shame with the Labour after 1997 and the subsequent election triumps was that they did not totally obliterate the Tories because how can a democracy be modern like it is in countries like Germany and others when we put up with privileged people treating the rest of the population like serfs. I assume their supporters on HYS are privileged if not how subservient of you all.

  • rate this

    Comment number 383.

    All political parties around the world who play the globalist game have the same, nasty agenda. Some may be glad it's the poor who suffer now, but unless you're filthy rich they'll be coming for you soon. Politicians are corporate lackeys. The banks are raking it in. What's 'good' for the poor today will be rolled out for everyone eventually. Beware & do your research!

  • rate this

    Comment number 382.

    For all of you who are concerned about not being able to survive on your weekly welfare cheque, stop to consider what would happen if you had no cheque at all. Lots of people around the world manage to survive without Government handouts - that's called ECONOMIC REALITY and it's coming soon to the UK.

  • rate this

    Comment number 381.

    I listened to the whole speech. After the "speeches" by the Balls and the Silly Billy,I found it deeply reassuring and obviously our nation's finances are in good hands. Please keep Milliband and Balls away from the British Economy or we shall be broke in less time it takes to say, " Another Labour B...s Up! Have people forgotten Labour's leaving message. "There's no money left!"

  • rate this

    Comment number 380.

    Reminds me of a lyric from an old Guns N Roses song. "We feed the rich while we bury the poor".

    The name of the song? Oh yes its "Civil War".

    No doubt one will be along shortly!

  • rate this

    Comment number 379.

    Social security is there, and should remain there, for people who need assistance now and again - we are all at risk of needing to dip into the benefit system, that is why we 'all' pay for it. It should not be there for those who are able to work but chose to reproduce many children instead. These people have caused this crisis with their expectations of a life without work.

  • rate this

    Comment number 378.


    When do we hear anything about the £120 billion Tax dodgers?

    Exactly the rich squirrel their money away in tax havens, then talk of leaving if they have to cough up.

    In reality few leave they can't handle the different cultures, languages, in these havens, have to compete with the super rich for school places. They hurry back to the UK with their tale between their legs.

  • rate this

    Comment number 377.

    It is obvious that the Tory Party can never win another General Election by themselves. This misgovernment therefore is merely temporary

    Next General Election will be Conservatives well down, Labour up, UKIP up, Lib Dems almost nil!

    Another hung Parliament, and Westminster yet again on the rocks, up to their back door tricks? The voter having no confidence in any of them

  • rate this

    Comment number 376.

    How about stopping individuals paying tax as businesses and getting round tax rules. There are many normal people as well as celebrities doing this - surely the tax they would otherwise pay would make a large dent in the deficit. We all know at least one person who is doing this. Why should I pay my tax in full just because I work for an organisation who will not pay me as a contractor?

  • rate this

    Comment number 375.

    Yep lets all give up our rights so you can just bully people into accepting lower pay & worse conditions.

    Well done George, you may well lose the next election now

  • rate this

    Comment number 374.

    As usual the soft targets are for the chop. The young and the poor will be hung out to dry whilst the tax dodgers keep the billions that could wipe out the debt instantly.
    Will a party ever come to power that cares about it's people instead of themselves?
    No wonder people grow up with the attitude of screw everyone else. It comes straight from the top!

  • rate this

    Comment number 373.

    The cuts have been coming since 2007. Five years to get ready. What...didn't think it would really happen? Just like that credit card bill, the country's deficit has to be paid eventually.

  • rate this

    Comment number 372.

    Child benefit should be stopped. It is wrong for those who don't have children to subsidise those who have too many. Also bus passes for the elderly would be abolished as we can't afford it and winter fuel allowance put on the state pension so that it can be taxed for those who pay tax. Also there should be a wealth tax so that the wealthy in terms of assets contribute more to tax receipts.

  • rate this

    Comment number 371.

    1) NO healthcare tourists from EU or anywhere else
    2) NO NHS or benefits to anyone that has not lived or paid in to the country in previous 5 years
    3) No child benefits after age 5 & for 1st 2 only
    4) Cut prison costs by half, paying savings to pensioners.
    5) NO to overseas aid until deficit cleared
    6) Close Parliament restaurants
    7) No Winter fuel payments to HRTs
    8) Suspend EU membeship

  • rate this

    Comment number 370.

    Many rich employers have got rich through their own hard work and by paying their workers a decreasing wage compared with what they pay themselves. The workers have had to claim Working Tax Credit and other benefits in order to get a living income or they would demand better pay. So my taxes end up subsidising the rich.
    Pay a living wage and save billions by stopping WTC.


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