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".

Start Quote

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”

End Quote

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.


More on This Story

From other news sites

* May require registration or subscription

The BBC is not responsible for the content of external Internet sites


This entry is now closed for comments

Jump to comments pagination
  • rate this

    Comment number 1189.

    Scrap child benefit after the 2nd child. If you can't afford to have 3 or more children, why should I pay for it? If you want a larger family, work harder to support it.

  • rate this

    Comment number 1188.

    every one..its all about the Multi Billions the government hand outs in housing benifits that is what is being targeted yet again.The whole system needs overhauling.
    How much money could be clawed back by the grey economy of landlords who evade taxes on their monthly payments from the benefits agencies,,but hang on their.. target that market the housing market will completly crash out of control

  • rate this

    Comment number 1187.

    Where exactly is it that the rich will go if they are taxed more?

    France? ha

    I will tell you where - where they are already going - where the sun shines & taxes are low.

    Does anyone here really believe they stay here & spend their money?

    Only the poor do that because they have no option.

  • rate this

    Comment number 1186.

    We are now embroiled in a life and death struggle for the soul of this nation. Either we are a country that offers a helping hand to our poor, our weak and our needy, in which case we are still great. Or we are nation that shuns them on the say so of the Daily Mail, in which case we have become truly tiny.

  • rate this

    Comment number 1185.

    Poor George, waking up in his regency mansion in Notting Hill, and as soon as the butler pulls back the velvet drapes, there across the road he can see a council tenant with the blinds still shut and looking forward to another fantastic day on state benefits! Such injustice must be punished its simply not fair on mansion owners.

  • rate this

    Comment number 1184.

    simple message should be to get back to work.

    Where are the jobs to get back to work?

  • rate this

    Comment number 1183.

    Sorry I'm late joining this forum but I've just come home from work.
    Well done George.

  • rate this

    Comment number 1182.

    @1126. Adam

    "Many people don't plan babies and why should they?"

    That is one of the most socially irresponsible statements I have ever heard.

    Not all of us reproduce like rabbits simply so we can get away with claiming as many benefits as possible.
    is that the next Tory policy - only the inner party members, I mean the rich, are allowed to have sex? Orwell would have been amused.

  • rate this

    Comment number 1181.

    I have commented on a lot of stories over the last few months.I am a OAP retired after having worked all my life. I am not a rich pensiner by any means but I manage, just.
    Regarding the proposed new benefit cuts and rules, can you see it working becauuse I can't
    There will be families out on the street, and children too. It doesn't bear thinking about. but something needs to be done.

  • rate this

    Comment number 1180.

    Much whining about the 'unfairness' The lefties never seem to answer the question what magic pot of money is supposed to pay for all these benefits? the career idle pay nothing, but complain at their lot! or the £1.4 trillion public sector pensions deficit? 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!

  • rate this

    Comment number 1179.

    Perhaps we should look to China and make it illegal to have more than one child, that way no-one will be entitled to excessive benefits.

    Politicians in this country have lost touch with the people - they have become a bunch of corrupt selfservers - or maybe they always were and we just didn't notice

  • rate this

    Comment number 1178.

    1118. "If they want people to be better off working than on benefits then surely the answer is to raise the minimum wage rather than take benefits of the most deprived section of the community"
    Wash your mouth out with soap, how dare you have a sensible idea on here, don't you recall the Tories voted against the minimum wage as it would destroy the economy overnight! Been a long night hasn't it?

  • rate this

    Comment number 1177.

    My Mother is a recovering cancer patient & has had her benefits put on hold whilst a debate take splace as to what she should be claiming for. Luckily I can help her out but it will be those who really need the benefit who will suffer

    Also my partner is a foreign national from outside the EU & is prohibited from claiming benefits as part of his visa conditions. I just wanted to make that clear

  • rate this

    Comment number 1176.

    Tories, obsessed with DESTRUCTION & PRIVATISATION!

    Yeah, we've got a deficit, AND WE ALWAYS HAVE DONE!

    Using this as an excuse to destroy the infrastructure of the country, as usual.

  • rate this

    Comment number 1175.

    Plebs are so dull. They'll swallow any Tory propaganda. See how the rich set the poor against the very poor? You are hook line and sinkering the lines you've been given because of the pleb inside of you. Whilst the filthy rich continue to live on your fat they deter malice back towards yourselves and being so dull you accept it all.

  • rate this

    Comment number 1174.

    Its not WHO is paying, but HOW MUCH each sector of the community is paying in relation to its assets. The rich pay more but when you take the wealth of a rich family and compare it against the wealth of a poor family, the PERCENTAGE paid by the poor in relation to what they have is FAR greater to what the rich pay. So in real terms its the poor, not the rich who are shouldering the greatest burden

  • rate this

    Comment number 1173.

    @1147. whatapointlessarticle

    Interesting concept - the UK benefits agency simply process the applications of non-UK citizens and forwards then to their country of passport to be paid....

    Not sure whether it would work or be legal and of course the UK might have to pick up the tab for citizens abroad including those swinging the lead....

  • rate this

    Comment number 1172.

    ##1160 1060
    uk imports 70% of its food
    uk produces only 30%
    uk votes 30% tory
    own 90% wealth
    do toris need the 70%
    answer no
    if 70% go
    uk is self sustainable
    defence a doomsday bomb of spent nuclear fuel
    based on MAD CONCEPT
    and that would be a solution
    we need 3 planets for sustainabilty
    lets not fool ourselves
    Human race is has been run

    gbye n thanks 4 the fish ty d dolphins

  • rate this

    Comment number 1171.

    Rich are making fortunes off the poor; as cheap labour, also selling their shoody goods and services to them. If they want to 'rape' the working class then they should pay heavy taxes to do it, avoiding the 23% rest of us pay in taxes. They're the scroungers, removing benefits from the poor makes them hungry & homeless, taxing rich doesn't. Why should the greedy rich lord it over us.

  • rate this

    Comment number 1170.


    Considering that Labour by their own admission would be cutting £18 for every £20 the Coalition are cutting."

    Depends on *where* cuts are made. For example, Trident will cost at least £34bn (BBC News) - is that really necessary, or is it a vanity project to keep our seat on the Security Council? That is the sort of 'hard question' that really needs answering.


Page 18 of 77


More Politics stories



BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.