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
    -1

    Comment number 1289.

    What next George let people on benefits sell their organ or forced abortions for people with too many children or even forced sale of kidneys for benefit payments it wouldent surprise me.

  • rate this
    +5

    Comment number 1288.

    George Osborne; "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."

    So Mr. Osborne thinks most homes in the UK are worth 2m+? Not sure what planet he is living on...

  • rate this
    +2

    Comment number 1287.

    We have Thatcher's children in power now and they are worse than the ideology that spawned them to the nth degree. It is gut wrenchingly sickening that the Tories have a political platform at all. I suspect that the prime contract tendering process for the provision of private sector run workhouses and soup kitchens will already be in an advanced state of preparation.

  • rate this
    0

    Comment number 1286.

    We all need fair to each other the simple face is there are large number of families that are now on a 3 generation where not one of them has worked a day in their life This has to stop
    Adults should use their commonsense only have thing they can afforded this is not happening with families having kids they can never suport Why should my taxes be used irresponsible people Two kids the max that it

  • rate this
    +3

    Comment number 1285.

    Unbelievable, get shares in the company you work for but give up some of your rights. What planet is this man on?

    I have just came across a company that has just been sold at a massive profit but it would be worth nothing without their workforce. What did the workforce get for their years of hard work and loyalty to help make the company worth so much money? Correct, nothing

  • rate this
    +3

    Comment number 1284.

    1263.SteveHG
    Just now
    "Just heard Ian Duncan-Smith refusing to comment on policies that haven't been thought through yet
    Says it all, doesn't it"
    I don't think any of his policies have been thought through.

  • rate this
    +4

    Comment number 1283.

    sell your rights hmm are not these rights not laws , so now its ok to sell the law of the land if you are tory of course !! the rest of us of course must repect the law because we are plebs

  • rate this
    +7

    Comment number 1282.

    This is all about punishing the undeserving poor- the workhouse mentality.
    If they wanted to make sure that work always pays they could raise the minimum wage. Despites business complaints that it would destroy jobs, this did not happen when they introduced it.

  • rate this
    +5

    Comment number 1281.

    Liars, all of them, in ALL parties, sharing a common mantra:
    * Don't worry about promises you won't be around to deliver
    * Delay any decision that might matter, but maybe embarrassing
    * Ignore the statistics that don't support your argument
    * promise the earth to target voters
    * Pander to the "it's offensive to be successful" mentality
    * JUST PLAN FOR YOUR NEXT JOB, WHEN OUSTED FROM GOVERNMENT.

  • rate this
    +3

    Comment number 1280.

    4 years we have been in recession,how long have we got to go ?
    go after big business tax evaders

  • rate this
    +7

    Comment number 1279.

    What was the statement? 'The rich pay more in tax'
    Shows just how much the minority earn then, while the majority scrape by to pay the least!

    Dave & George will never really fully understand the basics will they, especially when they appear to tar all with the same brush. Different views, different worlds - entirely.

  • rate this
    +3

    Comment number 1278.

    CB should only be paid for two children, most people do not want or have large families and if benefits were capped at 2 the money saved could then go back into the welfare pot, providing assistance for youngsters coming out of care, giving them a real start in lfe. A decent place to live, education at degree level, just think of the chances the young parentless could have.

  • rate this
    0

    Comment number 1277.

    1249.harry-south
    "and return to back street abortions?"
    Harry, that is nonsense and you know it. Things have changed, contraception is freely available and there's the morning after pill free to those who need it. Even after that there is the availability of properly regulated termination. Back street abortions existed when all of this was not available, the world has moved on.

  • rate this
    -1

    Comment number 1276.

    "1043.therealist
    Why won't they address the issue of massive tax avoidance?
    The Chancellor that did this would be a national hero so don’t you think if it was easy someone would have done something by now?"

    Please try and keep up - big changes were made in the last budget to restrict reliefs which take effect in April 2013.

    And tax avoidance only costs c.£5bn pa according to HMRC

  • rate this
    +6

    Comment number 1275.

    We are all born as slaves.

    Some manage to buy their freedom.

    Then they forget that they were once slaves.

  • rate this
    +4

    Comment number 1274.

    As Paul Krugman stated:- It really is just like a medieval doctor bleeding his patient, observing that the patient is getting sicker, not better, and deciding that this calls for even more bleeding.
    And the truly awful thing is that Cameron and Osborne are so deeply identified with the austerity doctrine that they can’t change course without effectively destroying themselves politically.

  • rate this
    +6

    Comment number 1273.

    @1241
    I am at work and there are things called computers here. Now as long as I do my job, my boss lets me keep up to date with the news and use HYS
    What a stupid comment to make

  • rate this
    -2

    Comment number 1272.

    I don't see the sense in cutting housing benefit to the under 25s, since this age group is struggling the most even to get into their first job, surely it would make more sense to help them move away from areas of high unemployment to find work, than encouraging them to stay with parents in areas where there might not be any opportunities?

  • rate this
    +4

    Comment number 1271.

    "There will be taxes on rich people in the years ahead".
    When's that then George? When somebody else is chancellor, or when you & your rich mates have installed some loopholes, so's you & your rich mates can avoid paying them?

  • rate this
    +3

    Comment number 1270.

    1244. marrt
    "This is how I see the future panning out:

    There will be low murmers, that get louder. A window gets smashed. A policemans helmet gets knocked off.. All hell breaks loose while the tory rich with their sh** eating grins run for cover."

    [as Andrew Mitchell tries to go through the wrong gate again.]

 

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