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
    0

    Comment number 1349.

    Its a no win. how do you reduce the benefit budget which by any definition is spread across every single person who stubs their toe and is not targeted at the really needy. Too many fringe benefits. Its time to rein them in but no time is the right time. However...at least have the common sense to get the economy going first so people can actually get jobs. Out of touch ? Yep....

  • rate this
    +3

    Comment number 1348.

    roflmao at 1232.
    telboy

    So anyone who works hours other than yours is a dole dosser???
    People do work other hours you know, otherwise you would sit in darkness at home when you finish you idiot.

  • rate this
    +2

    Comment number 1347.

    Time for Clegg to step up to the plate. We'll find out what his party really stands for - up to yet I've not been impressed. He seems more intent on clinging onto power (which they have no chance of earning in their own right) than bringing some sanity to proceedings. He has to defend the squeezed middle.

  • rate this
    +7

    Comment number 1346.

    My 20yo married daughter was beaten and thrown out with baby and ex is avoiding the CSA. She is now living at home with 2 other nearly fully-grown children. Our outgoings have doubled and we may lose our home; all adults are working We qualify for nothing. Will the Tories house our daughter/grandson alone in a flat or shall they house all of us when we lose our home?

  • rate this
    +6

    Comment number 1345.

    How typical! This government has convinced people that all the disabled and on benefits are scroungers! The DWP figures show that fewer than 0.5% of all disabled people on benefits are 'scroungers' and are actively working to reduce that to an even smaller proportion. SO that means that 99.5%+ of disabled people are genuinely in need of the benefits they receive.

  • rate this
    +2

    Comment number 1344.

    Figures show that through various loopholes and other dodges the wealthiest British companies get away with at least £12 billion in tax a year. Vodafone alone had a £6 billion tax bill wiped out by the HMRC.

    And yet, this government has not delivered on a manifesto pledge to clamp down on tax avoidance, instead cutting staff at HMRC and letting big companies get away with it.

  • rate this
    +5

    Comment number 1343.

    This joke of a policy has gone way too far! Is this guy for real?! We've come so far with establishing worker's rights and for this buffoon to wreck this should be not allowed. I usually vote Tory but not this policy! If the Tories continue with this and other stupid ideas then they are going to get a good hiding at the next election! What's this policy got to do with the deficit reduction?! Joke!

  • rate this
    -4

    Comment number 1342.

    I think it's been proven time and time again.

    Left wing governments wreck the economy, Conservatives clear up the mess. QED.

  • rate this
    +1

    Comment number 1341.

    Although I wouldn't trust George Osborne with the job of driving the plough - at least the Tories are in the right field. We MUST reduce welfare and change the attitude of those youngsters growing up in families where no one has ever worked for a living.

  • rate this
    +3

    Comment number 1340.

    Love his idea about "owner-employee contracts" - with the shares free of capital gains tax!! There is a CGT exemption of more than £10,000 per year anyway. Shows the kind of circles he moves in that he thinks that would be an incentive to accept the new type of contract.

  • rate this
    0

    Comment number 1339.

    Reading the most popular comments the future of this country is screwed and the majority of people are totally thick. Lets hurry up and bring back the Labour government so people can carry on spending and sticking their heads in the sand.......... not our problem the future generations can face up to it.

  • rate this
    +6

    Comment number 1338.

    I know all about worthless workplace shares as I work for Royal Mail. Their wonderful colleagueshare scheme paid out one day then the next day weren't worth a penny (but at least they were still worth more than this government).
    Tomorrow they announce the return of the workhouse as it will save them billions.

  • rate this
    0

    Comment number 1337.

    What about those of us who are having to fight for right to work but get kicked out of buildings and every part of our ability questioned when we're told it not about our ability, When it blatantly is.When department managers become the specialist and specialist become the instructed by management. why not just bring back institutions or gas us, your centainly on road to starving us

  • rate this
    +2

    Comment number 1336.

    I fully how understand how the benefits system has been so badly abused over the years. I think they should raise the National Minimum Wage to a more higher amount considering groceries and petrol prices are rising for various reasons. But more importantly to avoid people being better off on benefits than working.

  • rate this
    +5

    Comment number 1335.

    @ 1260. Davey Bones

    Oh right. So when the IMF has assessed this country, talking about our need to reduce the deficit which was the highest in the developed world, it was all just a bad dream. Labour in fact left us in a country that was a utopia.

    Oh thats funny....You are a perfect advertisement for introducing IQ tests to establish a persons right to vote

  • rate this
    +2

    Comment number 1334.

    Let's all vote to get the silver spoon posh boys out of power - oh wait they weren't elected anyway were they!

  • rate this
    -1

    Comment number 1333.

    This would appear to be the man's plan ?

    http://nollyprott.wordpress.com/2012/06/20/green-holocaust-2/

  • rate this
    +1

    Comment number 1332.

    The BBC have run articles stating that in the UK an individual has to earn c. £27k before they become a net contributor to the tax system and that average earnings were c. £26k.
    Welfare was intended to protect the needy and we all need schools and hospitals, but the system is unaffordable if those that can earn dont and the system produces too few candidates for higher paid jobs.

  • rate this
    +2

    Comment number 1331.

    Justin 150
    A bit economic with the truth methinks..
    "A global super-rich elite has exploited gaps in cross-border tax rules to hide a £13 trillion of wealth offshore – as much as the US & Japanese GDPs put together" – research by the campaign group Tax Justice Network
    .. inequality is much worse than believed, but politicians are still relying on trickle-down to transfer wealth to poorer."

  • rate this
    +3

    Comment number 1330.

    1297. David H people like you make me sick. You are the type of person who attacks disabled people who cannot work. NOT ALL of us are "dole dossers". These sweeping generalizations do not help. I am sure you are lucky and have a stable job.

 

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