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
    +2

    Comment number 1389.

    Comment number 98. GravityBeckons
    "I will be telling my grandkids horror stories about the Tories.

    Just to keep them on the straight and narrow."

    Make sure you tell them the difference between 'Tory' and 'Conservative' so they don't make the mistake of voting for Labour.

  • rate this
    +1

    Comment number 1388.

    So now my kids are expected to pay off a huge national debt that they never asked for. They will also have to work like Trojans to earn enough to pay for a 40% deposit on a mortgage. And if they end up in low paid jobs they won't get any housing benefit help either.

    Thanks tories/labour, what a wonderful legacy you have saddled my girls with.

  • rate this
    +1

    Comment number 1387.

    The Tories are a busted flush. Incompetent, lining their own pockets and those of their friends,mendacious, propagandists and hopeless in government, governing for the bankers, corporations and the rich but not for the majority of this country. Clegg and the LIb Dems are no better. Sack the lot of them.

  • rate this
    -1

    Comment number 1386.

    I RECEIVE DLA & iB.I GET A FREE MONTHLY 9 ITEMS PRESCRIPTION,NHS ELECTRIC WHEELCHAIR FREE BOOTS HATED EM AS LITTLE KID IN 60s 1970s.O ALSO HAVE DE FIB INPLANT NEW ONE DUE JAN;2013.I'M NOT SURE WHICH I ENJOY MOST MY CEREBRAL PALSY,CARDIOMYOPATHY OR MY VITILIGO.MANY OF U WILL BE PLEASED TO KNOW I'VE ALWAYS HAD A PHYSICALLY PAINFULL LIFE.I LUV YOUR TAXES X

  • rate this
    +4

    Comment number 1385.

    Now I see why the Tories want to leave the EU - it will be far easier to abolish workers' & human rights, employers able to demand people work 50+ hours, workers could be dismissed without reason but will keep quiet and do as told as there will be no benefit system to catch them if they get fired! & the rich will be laughing.
    And all being sold as "imperative for economic growth"

  • rate this
    +18

    Comment number 1384.

    3 weeks
    3 conferences
    3 millionaire leaders
    3 out of touch parties

    We need real change in this country.

  • rate this
    +3

    Comment number 1383.

    Your comment is spot on Strathclyde.....

    Being allowed to choose between a few bandits, which one should have the privilege of robbing you and controlling your life is not freedom or democracy. The usual suspects are put before us by the big money donors and each election people fall for this cheap illusion. If I wanted silly magic tricks I would have gone to Las Vegas!

  • rate this
    +3

    Comment number 1382.

    I don't want any shares. I'm not a capitalist.

  • rate this
    +4

    Comment number 1381.

    Funny old country we live in.
    Poor people seen as a big burden on society.
    (Except when war breaks out)
    Poor people do not deserve Housing Benefit?
    Just ignore the fact that it is poor people's Landlords getting the benefit and laughing all the way to the bank,.
    No doubt there are some honest Politicians and some honest Journalists..
    But..how is Joe Public going to find out who tells lies?

  • rate this
    +5

    Comment number 1380.

    @960: Nickportaloo. There is an obvious distinction between 'work-shy' and 'unfortunate' which you do not make; a person who is unfortunate to find themselves out of work is clearly not 'work-shy'...? As for the majority or minority, that is not my beef - it is those who make a life choice to not work and be paid for that choice I find unnaceptable.

  • rate this
    +5

    Comment number 1379.

    "1363.Tanglewood
    Of course, of you think that an annual income of £150K makes someone "rich" you'll disagree."

    Someone earning in one year what it will take most to earn in 13 years makes them rich by anyone's standards (except those on £150k, who have no idea how fortunate they are).

  • rate this
    +1

    Comment number 1378.

    #1331 The actual figure was £21tr and for the WORLD not just the UK. There is nothing wrong with having a bank account in Jersey as long as you declare it on your tax return but the Tax Alliance still count it as "hidden"

    But never let details such as facts get in the way.

  • rate this
    +2

    Comment number 1377.

    AT LAST
    lets hope he stops ctc being paid after the 2nd child and no new ctc claims whilst unemployed ,for far to long young girls have used the system to feed their life choice and migrants have abused it to have large families,,as for the end of h/ben for under 25's thats ok as long as they have a fail safe for children who have to leave an abusive home

  • rate this
    +5

    Comment number 1376.

    Not my fault I have been left disabled from a work accident,I worked hard and paid my taxes,Now the government has me as a waster and ATOS make Millions from the sick.Enough is Enough Now time to take from the rich in or country.

  • rate this
    +4

    Comment number 1375.

    "Perhaps its because the only people with time on their hands to comment on HYS, are those on benefits! Us workers are busy working to pay the taxes to keep them sitting on their bums!!!"

    You Managed to post!

  • rate this
    +3

    Comment number 1374.

    Beware if you believe the cuts stop here. The conservatives are precluding all their 'we won't break any promises' statements with 'not in this parliament'. In other words, wait until we are re-elected and we lose our Lib Dem social conscience. Pensioners will be the next victims.

  • rate this
    +4

    Comment number 1373.

    1361.eMikey

    I love the fascists/capitalists (Tory supporters) on here! It's all me, me, me, me, ..... cut, cut,cut,cut!

    Wonder what they would do if it was their own money ... hold on ... that's right .... tha't why they NEVER pay their fair share of tax!

  • rate this
    +6

    Comment number 1372.

    1334. Rodders 5 MINUTES AGO Let's all vote to get the silver spoon posh boys out of power - oh wait they weren't elected anyway were they!



    What's it like being thick?

  • rate this
    0

    Comment number 1371.

    In essence I agree with scrapping child benefit for people who have larger families but would put the figure at 3 children rather than 2. I also think we should scrap child benefit for wage earners of over 40 thousand since realistically they don't need it. No charges of 40 per cent for income earners of 54 thousand. Ridiculous to give someone free money on those wages!

  • rate this
    +6

    Comment number 1370.

    The "Rich" are either very well educated, or their Accountant's are, and running every possible loophole in the book. Those holes need to be closed and eradicated. Only working people pay taxes, so THEY should be the only people to be able to claim Tax Credits. SIMPLE ! What the heck am I missing here? The instant abolition of Tax Credits could save that £10bn in one fell swoop.

 

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