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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  • Comment number 1329.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +4

    Comment number 1328.

    The reason the 50p tax rate didn't make any money was the rich pushed their tax receipts back a year, if they had of run it just another 12 months they can't push their tax receipts dates back. It's like he doesn't understand finance!

    I do agree on some parts, I know I make less than the family on benefits next door to me!

    However you have to be realistic on the taxing the rich claims!

  • rate this
    0

    Comment number 1327.

    yet again we cut the money to the poor because they have too much money to have an incentive work, while not taking from the rich because if we did they would have no incentive to work. While I agree it isn't a good thing to have multiple generations in one family who have never worked, putting people from these families into work doesn't reduce the total unemployment, just shifts it

  • Comment number 1326.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +2

    Comment number 1325.

    Rights for shares!!!! you can help yourself to the goodies kept in the stationery cupboard but dont ask for maternity leave... If Gideon was a dog you've guessed it.

  • rate this
    +1

    Comment number 1324.

    So Mr O, when are the rest of us going to get a tax break as the rich have already had one? ....the quicker we(as a country) get these tories out, the better for us all.

  • rate this
    +4

    Comment number 1323.

    The government and it's media, are the puppets of bankers. The only answer is revolt. You can either take the power back and sustain the social safety net we ALL worked damn hard to provide - or stay silent, until you are next on their list. People that advocate this as a good idea are no better than Nazi's. Shame on you.

  • rate this
    +4

    Comment number 1322.

    42% of welfare expenditure goes to pensioners. 20% goes to Housing benefit, 15% is child benefit and child tax credit; 8% to disabled people (both in and out of work); 4% to those who cannot work due to sickness or disability; 4% on income support (single parents, carers and some disabled); 3% on jobseeker’s allowance; and 2% on carer’s allowance and maternity pay,with 3% on other benefits.

  • rate this
    +2

    Comment number 1321.

    How will anyone listen to a group no matter who they are they will twist everything to suit themselves, Not one is in the real world and as usual it is the weak and the sick who suffer while the fat cats get richer and the poor get poorer.They fail to see the genuine sick and disabled who are being wronged by the likes of ATOS who are making Millions on the back of this.Government won't do Go Now

  • rate this
    +2

    Comment number 1320.

    I don't doubt that the Lib Dems will support all this and add another shameful line to their political suicide note.

  • rate this
    +4

    Comment number 1319.

    How about reducing the benefits bill by growing the economy?

  • rate this
    +7

    Comment number 1318.

    I received a notice today from the Job Centre about how the law has changed to make it easier to kick people off Job Seekers Allowance. When thousands of people get kicked off benefits, the government will hail the reduction in claimants as the system working.

    I look forward to the day I get a letter saying the law has changed to make it easier to find suitable and sustainable employment...

  • rate this
    0

    Comment number 1317.

    Funny thing is, outside the rarified and socialist lite hys, measures to reform the benefit culture actually play rather well.... That's why they can do it. Now if we take pensioners....who probably should be means tested for winter fuel allowance and bus passes, are untouchable. They vote.

    They just need to shut the immigration door and we are cooking on gas.

  • rate this
    -4

    Comment number 1316.

    1273. whine99
    JUST NOW
    @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

    +
    Would you mind having your boss confirm that?

  • rate this
    +1

    Comment number 1315.

    Mr Osborne ruled out such a measure saying: "It would be sold as a mansion tax, but we would soon find most homes in the country incur a mansion tax.." Most homes in the country above £2m?! Shows how utterly out of touch you are - or how ruthless!

  • rate this
    +4

    Comment number 1314.

    Until politicans can be held fully accountable for all the broken promises..and go to prison any arguments are hot air. Doesn't matter what party they are in once they get to Parliament they are all contaminated by self interest and greed....maybe something in the water supply addles their brains or something but truth is they all end up hypocrites. No integrity, no substance and no use!

  • rate this
    +2

    Comment number 1313.

    i have nothing positive to add on this topic - politics is now so out of touch and remote to the common man in the street it really saddens me.

    http://www.youtube.com/watch?v=gbO2_077ixs

    help us, someone, please

  • rate this
    +6

    Comment number 1312.

    I have to agree with other posters , you mess around with stuff that you don't (or don't want to) understand, then don't be surprised if all hell breaks loose, when it goes wrong ! The tories are playing with fire in regard to the welfare sytem !

  • rate this
    +5

    Comment number 1311.

    How about measures to stop a multi-millionaire MP chancellor RE-mortgaging the large house he already owned outright in tatton & getting the tax-payer to pay him £100,000 in interest repayments?

    How about having ministers who know their a**e from their elbow who dont cost the tax payer £40+ million because they are unable to oversee a rail franchise bid? that should save a few quid!

  • Comment number 1310.

    This comment was removed because the moderators found it broke the house rules. Explain.

 

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