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 769.

    The 1% still being protected i see, Not 1 policy designed to get us out of this mess, just dig a deeper hole.....

  • rate this

    Comment number 768.

    Everybody take a deep breath and repeat after George:
    War on the poor!
    War on the poor!
    War on the poor!
    War on the poor!
    War on the poor!
    War on the poor!
    War on the poor!

  • rate this

    Comment number 767.

    I have noticed lots of comments regarding over breeding etc. Apart from the manifestly obvious fact (apart apparently to Osborne) that children do not choose their parents before they are born
    If we in the UK all only had one child per family we would face the same demographic time bomb that will be experienced within the next 20 years in China.

    An aging population and less tax payers

  • rate this

    Comment number 766.

    I'd agree with you 717 but unfortunately it's people like me, who ask the state for help only when we need it that will suffer thanks to this idiot's policies. I hope never to be unemployed again, I'd hope the state would help me feed ALL my children if I do end up having to claim benefits again. He'd be better off providing funds so that the tiny minority who abuse the system can be identifed

  • rate this

    Comment number 765.

    They have trailer parks in the US, can't we do that here? that would save a bit and wouldn't be seen as something to aspire to like the teenage mums in our part of the world that get knocked up to 'get on the list'.

  • rate this

    Comment number 764.

    Appalling admission of No Nation Conservatism just an off shore trust fund for the insider class. He's made sure I vote for Millbean just to get rid the out of touch toff

  • rate this

    Comment number 763.

    "It's not a mansion tax but a homes tax, and this party of homeowners will have no truck with it.'
    Err,so what do you suppose Council Tax is Osbourne? Its clearly escaped your notice that HOMEOWNERS PAY IT, as do most other householders. Btw, what does Cleggie say about all of this....

  • rate this

    Comment number 762.

    We now know the truth. Osborne said it: The Tory party is 'the home owners party'. So all the young still living at home because they cannot afford to buy, those who have lost their homes because of his cuts,those on low incomes who cannot afford a mortgage, the elderly in nursing homes, Osborne doesn't want to know them or cares what happens to them.

  • rate this

    Comment number 761.

    One of my friends was made redundant 5 years ago, since then hes lived on benefits, when he sold his house he had too much in savings to qualify for benefits so he bought a new car !, both his kids went to uni and each received a nice £3250 hand out, Ive worked all my life, drive a 12 year old car and my kids had to work in the co-op to get money for uni.
    This makes me very angry.

  • rate this

    Comment number 760.

    will this actually happen?? or is it just to scare the doll dossers into getting off their ar5e and getting a job!!

  • rate this

    Comment number 759.

    @735. I work with people who have never had a job (with learning disabilities) and the overwhelming majority of them would like a job - even those who are 50+.
    There are some exceptions with the welfare culture, but not as many as you seem to think.

  • rate this

    Comment number 758.

    @667. CN

    Why do people want to punish success? I want to be successful but when I do, I'll lose 50% of my reward, which is unfair.
    You are assuming that whatever reward you get is fair. That is quite a big assumption, don't you think?

  • rate this

    Comment number 757.

    3 Minutes ago
    After spending 7 weeks on benefits I am about to return to work.
    How l willl pay for the 4 weeks before I am paid is beyond me.
    Ask JC about Return To Work Credit?
    I think they do a 4 week run on for housing/council tax benefit?

  • rate this

    Comment number 756.

    Ex Tory Voter

    Got personal again! Two types of people in the world, the GIVERS and the TAKERS. Some people TAKE because they fall on bad times and they need to rely on help. Others TAKE because they don't know any other way of living or they're too lazy to do anything about it. Sky's business model is not to chase up outstanding bills? That how your world works?

  • rate this

    Comment number 755.

    No doubt that benefit should be balanced and cut where needed but what worries me from this Tory lineup is they talk a great game of being in this together and the rich shouldering their share but its all extremely vague and in the "future" whereas any cuts and tax rises to the squeezed middle and the poor is focused on and in great detail.

    Very little on growth as well which is a worry

  • rate this

    Comment number 754.

    Salami slicing causes problems.

    No child benefit after the 2nd child. Invest that wasted 30odd billion HS2 money in new council houses. They will reduce the housing benefit bill and can used as a hammer to lower the wider rental market prices.

    Make all benefit claims contingent upon an agreement to have a contraceptive implant. Scrap ALL tax credits, all tax allowances and holidays.

  • rate this

    Comment number 753.

    Simply doing away with the higher rate tax relief on pensions would save £7 billion per year. They don't even have to collect it, just not hand it out.

    After all where is the justice in higher earners getting double the tax relief on their pensions.

    Is it fair that those on average and low incomes are subsidising the pensions of the better off

  • rate this

    Comment number 752.

    Perhaps the Tory leadership should look into the MPs second income paid for by taxpayers that allegedly they need/deserve. Scroungers come in lots of disguises

  • rate this

    Comment number 751.


  • rate this

    Comment number 750.

    So, instead of looking for ways to bring growth to plug the gap, Osborne plans to further reduce the amount of money that can move around the economy, while at the same time making it harder for the poor and lower-middle class youth to begin their independent adulthood.

    Thank you, Osborne. Great to know we're all in this together.. this being the instatement of the class system.


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