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 1309.

    These policies are a joke at best. Who is going to take the shares in a company and lose all rights. No one sane. How are they going to enforce under 25's having no housing benefit? Particularly for a single parent whose partner has decided he or she doesn't fancy parenthood and doesn't fancy paying towards the child.This then means the parent who stayed to care for the child would be punished?

  • rate this
    +2

    Comment number 1308.

    With the powercuts looming, so few engineers in politics,and the slave mentality we'll be like North Korea in a few years. Anyone noticed how the non-pleb Tory leadership are putting on weight? whilst the way it is going you are going to lose more than money in the next the few years...

  • rate this
    +1

    Comment number 1307.

    1302.Rob
    He`s having a Thatcher moment. Its what tories do.

  • rate this
    +1

    Comment number 1306.

    Give it a break GO, no one can live on benefits unless you got 4 or more kids as well stop going on about the benefits most of the people claiming benefits are old enough to have worked and paid taxes at some time as the young are on job seekers GET THE REAL THEIFS RICH, POLITITIONS who dont pay taxes because they can all get out of it so easily can u remember when u last paid tax if u ever did

  • rate this
    +5

    Comment number 1305.

    Given that the number of claimants far out-weighs the number of jobs, what happens when IDS & GO have starved & frozen enough people to fill all the vacancies? Must be great being a multi-millionaire sitting in one of your £million + homes telling people how lazy they are and how little they need to live on!
    Anyone fancy going into partnership building g-s ch-m---s? That'll be the next step!

  • rate this
    -2

    Comment number 1304.

    @1180. Engineer101
    Teachers etc pay in 10-15% of their pensions, and the private sector picks up the rest, but we're the selfish fat cats?? we get nothing free!
    ---
    that's because the private sector employees didn't fight hard enough for concessions from the rich and the powerful. You get what you fight for in this world.

  • rate this
    +2

    Comment number 1303.

    1248.WorkingClassWorker

    "At least Georgie boy's not a hypocrite. You have to give him that."

    I believe that 38degrees had a campaign on George as the Artful Doger for avoiding to pay tax he was branded as a tax dogger.

  • rate this
    +5

    Comment number 1302.

    So now he's cutting the bennefits of the unemployed that this shower has hepled create. How long before he's bringing back work houses and soup kitchens. Please sir can I have some more?

  • rate this
    +3

    Comment number 1301.

    If this was Afghanistan, we'd have people running into Parliament with suicide vests on because these aren't conservatives, these are destructive rich boys with power.

    George Osborne, let it be known that I consider Assad, the leader of Syria in higher regard than you.

  • rate this
    +2

    Comment number 1300.

    CALL For ELection NOW or we ALL REVOLT
    problem is all of em ,cons,labour,ukip.greens,bnp all of em are rotten to the core and controlled by the banks business elite ppl,just care about money nothing about doing the right thing,we need to clean em all out n start fresh,they are a bigger problem than the deficit that needs to be fixed first before we can worry about fixing the economy!n cheats!

  • rate this
    +2

    Comment number 1299.

    The Media constantly say the country likes the spiteful plans on the vulnerable. They conveniently ignore that the wealthy are not targeted in the same way.
    So it's great to read some of the comments on here berating Osborne and Co regarding their attacks on the vulnerable and the support their comments have received.
    The sneering attitude of those who have no need to worry is repulsive.

  • rate this
    0

    Comment number 1298.

    Regarding the comment by Seriously No. 1274 - You are spot on!!!!!!!!

  • rate this
    +5

    Comment number 1297.

    1232.telboy
    3 Minutes ago
    well....... its nearly home time for 5% of us posting on here.
    the others (doll dossers) are already at home and have all the time in the world.
    btw its us 5% paying for their, computer, electric, broadband etc etc etc
    thankyou and goodbye :-)
    ===================
    and it's your employer's money & resources you are using

  • rate this
    -2

    Comment number 1296.

    Ahh, there there. Is Georgie and his nasty party bullying you again? You poor souls, but let's vote in Labour next time, and make it a case of "shall we call the IMF now, or later?".
    I do however believe in a maximum wage, where nobody can earn more than 500x what the lowest paid worker owns. So if you want to earn more, you increase the lowest paid worker's salary first.

  • rate this
    -3

    Comment number 1295.

    Yes we should help the poor, the weak, the needy.
    But no-one else needs welfare, so why did Blair, Brown, Balls allow welfare to get totally out of control?

    Thank God this government is sorting out the mess.

  • rate this
    0

    Comment number 1294.

    The tragedy is that the Lib Dems could have bought some force to bear on the coalition so that the burden could have been spread fairly. This country has been poorly run for years by both main parties.

    Sadly Clegg has lost sight of what was right and can only see what he wants to see

  • rate this
    +2

    Comment number 1293.

    1272.goldberry
    Just now
    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?

    .... and there you have it - the Tories have no commonsense. They can't work things like this out because they don't understand the basics.

  • rate this
    0

    Comment number 1292.

    Its bad enough now?
    Just wait til 2015/2016...
    You aint seen nothing yet.
    It will be far worse.
    Good Luck folks on this Fiscal/Political Nightmare...

  • rate this
    +3

    Comment number 1291.

    #1261 Winston Smith

    "They have just begun".

    Actually the promised cuts have yet to materialise. The sooner, the better, I say.

  • rate this
    -3

    Comment number 1290.

    I don't think the agenda here is to try to win at the next election. The biggest problem the Tories had was trying to drop the 'nasty' tag. This clearly won't do it. I can only think they are trying to lurch the country so far to their unfettered capitalism ideology so future governments find it hard to fix in a short time. With the support of the un-liberal demo-cats of course.

 

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