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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  • rate this

    Comment number 549.

    The usual sad vitriol on here about Tories always robbing the poor to give to the rich and moans about the rich and their tax avoidance, (which the Coalition are looking at, which is more than Labour did in 13 years).
    And, as for Tory party donors, try comparing that with Labour's main donors, who expect a return on their investment, even though they represent only about 10% of the population?

  • rate this

    Comment number 548.

    @ 524.
    thelostdot Jobseeker's allowance is just the tip of the iceberg. The vast majority of benefit payments to working-age people is housing benefit. Then there's Council Tax Benefit, Child Benefit, Child tax credits, working tax credits, ESA, Income support - the list of benefits is endless.

  • rate this

    Comment number 547.

    @464. justbob
    Actually there are more and stronger similarities between this HYS and France circa 1789 (i.e. just before the revolution.)

    Privilege will never willingly relinquish privilege.
    And the People will never take up arms until they are starving.
    Caesar had it right, give them "bread and circuses". Hence the Sky tv's

    How to rebalance the budget? Reduce tax relief on business loans

  • rate this

    Comment number 546.

    People shouldn't have children they can't afford (benefits or otherwise), but what about other measures.

    Affordable childcare - allows people to work.
    Real jobs.
    Retirement age - lose your job in your 50s you might be on benefits till 66-68 (what about early access to those who've worked for 35 yrs or more?)
    Cap rents.
    Pay living wages - scandalous that workers need benefits to live!

  • rate this

    Comment number 545.

    to parranger # 453.
    You are not correct to say if you earn £1 you can't spend £2 - that is exactly what most of the country was doing under previous governments and under this one too - and what keeps industry turning over. You BORROW based on what you reasonably expect to be future income, how else do you think most people put a roof over their heads?

  • rate this

    Comment number 544.

    Tax avoiding rich...Abramavich, Branson, Sugar, Lewis Hamiliton, Simon Cowell,- Which the country still watch,support and like apparently, BBC consultants and a large proportion of skilled professionals pretending to be 'private companies' of 1.. all 'legally' evading high levels of tax these 'rich people'? Answers on a postcard how to tax them more please....

  • rate this

    Comment number 543.

    10 Billion, silly headline grabbing figure. Benefit cuts, I would prefer the figure to be 100%. Then redistribute the wealth to working people into their pension after every completed decade of work. This would lead to a dignified early retirement, leaving jobs for the workless.

  • rate this

    Comment number 542.

    Child benefit costs around £15bn a year.
    Osbournes tinkering might save £1.5bn

    Just stop child benefit for all children born after 9 months from today ( those who have it keep it but frozen at todays rate) and then

    "if you cannot feed them do not breed them"

    Your choice - your cost


    Oh and a load of admin saved as well

  • rate this

    Comment number 541.

    France are increasing high rate tax to 75% because it will raise eu20bln - where austerity cuts would only produce 10bln.I do not suggest our top rate is increased to 75%, but believe reducing it, together with other tax advantages for high earners - amounts to the economics of the mad house.Conservatives are to blame for policies and should be damned for them..

  • rate this

    Comment number 540.

    If it was that easy to stop people moving their money off shore it would have been done already! You can't stop people taking their money off shore. There are a few more things that could be done but tax avoidance is not illegal and would be very very difficult to do so. Use our tax more effectively ie don't take so much!

  • rate this

    Comment number 539.

    Doll Dossers are P.L.E.B.S !!!

  • rate this

    Comment number 538.

    'How dare Osbourne tell the British public how many children we can have!'

    He's not - read the details before turning on the histrionics !

    The main point was if you want a large family don't expect everyone else to pay for it.

  • rate this

    Comment number 537.

    Maybe they should have to work to get their benefits. Councils have had to make cut backs on staff, maybe benefit claimants could be used for these positions. They get work experience and don't cost the government any more than them been sat at home. I appreciate some people are sick or have children to look after, but an awful lot of benefit claimants can work but they choose not to.

  • rate this

    Comment number 536.

    Brave George, attacking the poor yet again.
    If he and his cronies had any idea what it's like to try to get by on minimum wage (you take home about £200 for a week's hard work) then he wouldn't spout such nonsense as he's been doing today.
    If it's unfair that benefits are better than work, then ensure that people earn a decent wage.
    George's description of those on benefits is a lie.

  • rate this

    Comment number 535.

    It makes me physically ill when I read about the likes of Osborne pontificating on morality and pretending that cutting billions in benefits and striping workers rights will make this a better country while bankers rake in billions laundering drug money through cartels that are run by the CIA and MI6. Don't believe me?
    Research the Sinola cartel, fast & furious, and read testimony of DEA agents.

  • rate this

    Comment number 534.

    Unemployed qualified accountant desparately struggling to find a job for HIRE!!! Please target such comments to the 5-10% "benefit" scrongers - don't anger/outrage the 95% with shallow ill-thought out comments, AND -

    1. Help from day 1 (not xx day).
    2. Structured Work Programme - (a) 18-25; (b) professional / +50 (c) trade / +50; (d) etc.
    3. Put recruitment companies alongside providers.

  • rate this

    Comment number 533.

    478. Harry Lime
    Time for our regular reminder - why we are in this financial situation today -
    NOT the previous Government
    So the fact that it was a lack of regulation that allowed this contagion of sub-prime default and that Gordon had a deliberate “light touch” approach to regulation of London the biggest financial centre in the world, had nothing to do with it?

  • rate this

    Comment number 532.

    So David Cameron thinks that those under 25 who don't earn enough shouldn't get to live in their own homes with contributions from the state? Is this the same David Cameron who didn't earn enough votes to get the keys to number 10 on his own?

  • rate this

    Comment number 531.

    I was sitting in a council office last week helping my mother in law sort out her council tax benefit and a member of the public said 'So that's where my tax money is being spent - on scroungers claiming benefits' I turned round and said 'Well it must be my tax money aswell and my mother in laws as we both pay tax as I work and she pays tax out of her pension' He looked rather sheepish and left.

  • rate this

    Comment number 530.

    come to areas like Peterborough/Corby and see how many eastern eurpeans are now located here. Their claiming millions per week in Child benefit/tax credits that is being paid back to bank accounts overseas by the paymaster general. thats why its going up each year!


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