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”

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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
    +9

    Comment number 1449.

    #1422: "All we want is an end to tax evasion and a reasonable contributory amount from the tax havens"

    Agreed, if we take out the class warriors' "tax the rich" nonsense there is a clear case for those with extremely high incomes to pay the *same* proportion of their income in taxes as others do. Problem is that there are too many vested interests (including HMRC) in maintaining the status quo.

  • rate this
    +3

    Comment number 1448.

    1432.SillyEnglandDotCom

    "The fool can say what he likes now because he knows his party won't be in power come the next election."


    Its not what is said, it is what is done.

    The Tory are all about DESTROYING THE INFRASTRUCTURE OF OUR SOCIETY. They did it in the 80's and now they are back to finish the job. Idiots buy into it through fear & lies.

    Demonizing the poor has always been their mantra.

  • rate this
    +7

    Comment number 1447.

    " in return for the employee giving up their unfair dismissal, redundancy and training rights and also the right to ask for flexible working.".
    So, they can sack you when they like, treat you as they like, loyalty will mean nothing you cannot advance , and anyone who has children or is a Carer might as well not work!

  • rate this
    +5

    Comment number 1446.

    1406. Woodrow
    JUST NOW

    Some of these kids don't have savings to fall back or home to go back to. Imagine yourself without your safety net and you might have some more compassion. Especially if they stuck you in a hostel at the age of 17 until they could find you a better place and imagine maybe that you were pregnant and the father decided he didn't want to know. feeling scared or alone yet?

  • rate this
    +6

    Comment number 1445.

    @ 1362. Lefty Lucy

    Maybe you should look at how the Chinese are able to dominate the worlds economy first.

    Do you fancy working in a factory for the equivalent of 120 pound a month so chinese products can undercut anything that western countries produce.

    No, then you really shouldn't use china as a great example of what a left wing government can achieve

  • rate this
    +9

    Comment number 1444.

    Funny how the Tories would rather squeeze the poor than get 'Big Business' to pay their taxes, but I suppose they are 'Big Donors' too.

    http://www.telegraph.co.uk/news/politics/8875360/Taxman-accused-of-letting-Vodafone-off-8-billion.html

    NB. That's the Telegraph not the Guardian!

    As for playing Eugenics with benefit claimants, will the extra kids be taken into care or just allowed to starve?

  • rate this
    +1

    Comment number 1443.

    @Nicola Courtney
    "...The conservatives are precluding all their 'we won't break any promises' statements with 'not in this parliament'.

    It's not peculiar to the Tories, why I remember a New Liebour education secretary promising no further education fees...in this parliament.

  • rate this
    +9

    Comment number 1442.

    "1396.PhilKs
    If you listened to Osborne's speech clamping down on tax loopholes is exactly how he proposes to get the rich to pay what is right."

    The key word is 'proposes'. Proposals, and well as promises, from this lot are so much hot air. If, somehow, a benefits claimant found a loophole to get more money you can bet it would be closed within days. How and why are tax loopholes any different?

  • rate this
    0

    Comment number 1441.

    Whats interesting in all the comments about how outrageous this is is there are not many suggestions, practical suggestions, as to how we reduce this debt the last Gov left us with. Future generations are screwed unless we do something now. Its an open non political question but once you have bled the rich what next ? What do we do ? My view is you have to change the culture, create the wealth.

  • rate this
    +4

    Comment number 1440.

    1373. Winston Smith
    I love the fascists/capitalists (Tory supporters) on here! It's all me, me, me,
    I worked hard at school/uni. I worked hard at a successful career. I’ve been redundant twice but found jobs in under 6 mths. I pay normal PAYE. I’ve never borrowed more than I can repay. Why shouldn’t I benefit from my hard work? Why should you?

  • rate this
    +6

    Comment number 1439.

    Vodafone sent me an email the other day saying they were increasing their prices on my contract (despite it already being 12 months into the 24 month cycle). So I assume they can still afford to pay the correct amount of tax they owe, but it seems Oboe Egg Snorer (it's an anagram) doesn't have the courage to make them and the other evasive, selfish, greedy, delusional, parasitic trolls pay.

  • rate this
    0

    Comment number 1438.

    1378. Justin150
    3 MINUTES AGO
    #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.

    +++
    Actually is was £13tr ($21tr), "But never let details such as facts get in the way."

  • rate this
    +4

    Comment number 1437.

    telboy@1232
    " 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 :-) "

    Well...
    It's nearly time to be on my way in late hours of the dark evening to do my night-shift.

    Thank you and goodnight :-)

  • rate this
    -4

    Comment number 1436.

    The lefties are out in force on this forum, but nationally, benefit cuts are popular, and that's what counts!

  • rate this
    -4

    Comment number 1435.

    i would rather have thatcher and hitler than this lot.

  • rate this
    +11

    Comment number 1434.

    Very easy to demonise those on benefits by depicting the minority of those who abuse the benefit system. I'd prefer to hear a deficit cut plan that focused on increasing jobs which would increase tax receipts and put money back into the economy, rather a focus on cutting benefits and services to the poorest and the disabled. Never have so few betrayed so many with this claptrap.

  • rate this
    +5

    Comment number 1433.

    sjacksonAFC
    5 Minutes ago
    I agree- maybe reaching out to these families and giving them useful advice and support to get out of unemployment and into work and further education, better schools, and creation of job opportunities in their areas would do more good than the George Osbourne tactic of cutting financial help!

  • rate this
    +5

    Comment number 1432.

    The fool can say what he likes now because he knows his party won't be in power come the next election.

  • rate this
    +1

    Comment number 1431.

    Poor show Conservatives and Liberal yes but how much worse would it have been under Labour who have caused most of the problems by their inept years in power.
    Time child benefit was limited to the first two children, this island is full up and has been for the last hundred years, will have to ration the right to drive in the south of England the congestion is that bad.

  • rate this
    +1

    Comment number 1430.

    1389.Perpetual Sigh
    2 Minutes ago
    Comment number 98. GravityBeckons
    "I will be telling my grandkids horror stories about the Tories.
    ====
    and if Labour get back in, "Fairy Stories"

 

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