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.

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.

 

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

Comments

This entry is now closed for comments

Jump to comments pagination
 
  • rate this
    +12

    Comment number 1469.

    I'm fed up with all the spouting about having to reduce the deficit only by cutting benefits.

    We do need to cut benefit fraud/misuse.

    But to be fair, the other end has to be tackled as well.

    Stop the big bosses stripping such great rewards out of their companies. Most are not entrepreneurs. They just managed to hack and stab their way to the top.

    And get big companies to pay their taxes.

  • rate this
    +2

    Comment number 1468.

    I'm a 45 year old single male with no kids, living in a shared house working 24 hours, taking home £600 a month. My rent alone is £300, still no help from any benefits.
    Even the DWP say I was an idiot to get a job.
    In it together!

    I need to get 6 more hours a week then I can get help????!!!!
    So if I earn more I get more, typical tory agenda, RICH GET RICHER!

  • rate this
    +5

    Comment number 1467.

    I hate the Labour Party. I hate the way they wrecked our economy and so made this wretched government even plausible. The only thing I hate more is hearing George ‘priviledge’ Osbourne, Dave ‘Never done a days work in his life’ Cameron or Iain ‘not got a clue what he’s talking about’ Duncan Smith discuss situations and experiences they have absolutely no knowledge of.

  • rate this
    0

    Comment number 1466.

    @1413.Pleb : The thing you need to realise when quoting a percentage of GDP is that 10.7% of GDP during a boom time is loads more that 11.6% pre-boom. So yes, Labour did increase the amount spent on welfare during their time in office. And essentially at a time when welfare was least required ... being a boom and all. Welfare spending should never be a linked to a percentage of GDP.

  • rate this
    0

    Comment number 1465.

    Comment number 1435. mackemade

    I think we've still got them

  • rate this
    +1

    Comment number 1464.

    A new hub airport doesn't sound like a bad idea now. Cheap as chips in comparison to the deficit and a big creator of jobs and wealth.

    Lets start creating and building some big infrastructure projects.

  • rate this
    +4

    Comment number 1463.

    Of course it is easy to cut benefits & say those out of work shouldn't get handouts but of course to get people into work there needs to be more opportunities, vacancies & training & these are being cut. In some areas there just aren't jobs. I agree that the welfare bill has to be cut but there also has to be economic growth & jobs for people to take. The Government has to sort this out too

  • rate this
    +7

    Comment number 1462.

    1332. JediDad

    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.
    ---
    all that shows is how ridiculously low the wages being paid in this country are compared to the cost of living. See my post in the 'highest rated'.

  • rate this
    +3

    Comment number 1461.

    Typical tories cuts not out of the rich wallets,but lets take more out of the the lower paids wallets.

  • rate this
    +2

    Comment number 1460.

    It is time for the rich to open their wallets - and pay their taxes!

  • rate this
    +1

    Comment number 1459.

    1384.martinfartin

    Martin, that is the best and most accurate comment I have read on here tonight.

    Similar to when the Labour conference was on, the opposing Central Office had it's staff working overtime trashing what was said.

    There's precious little difference in all the party's and they are all just looking to look after themselves.

    There's no such thing as an honest politician.

  • rate this
    -2

    Comment number 1458.

    @ 1440. therealist

    I think the question is, Why should you (or anyone else) benefit from my hard work ?

  • rate this
    +1

    Comment number 1457.

    People are entitled by law to Free Health care , Housing benefit , Welfare payments etc and that's all there is to it. And If you don't like that , then do the country a favour and go live elsewhere - America. is about 5000 miles westwards , you can't miss it, it's the place where all the crime , poverty and inequality is !

  • rate this
    -2

    Comment number 1456.

    Hilarious how just about every comment that is an Ad Hominem attack on Rich/Tories/Bankers/Thatcher/Capitalism/Private sector fat cats, breaks Godwins law or just a general leftie rant gets a positve rating, and most that espouse responsibility and self reliance get a negative response! Brilliant! Keep the red flag flying Bruvvers!! all out! Mmm, that will help...

  • rate this
    +5

    Comment number 1455.

    This is great for those on a nostalgia kick, if you close your eyes you can almost imagine Thatcher is still in power, Same Tory mantra, fill their pockets and stick the boot into the Vulnerable.
    At least this time round there's nothing left to sell off (althought they did try the forrestry). Still left with the poor legacy of the sell offs and still haven't managed a decent train system !

  • rate this
    -3

    Comment number 1454.

    They should privatize the BBC, with it's left-wing following, and end the TV Licence if they want to be popular. The Tories are behaving like plebs when they accept the status quo because of yesterdays rules.

  • rate this
    -2

    Comment number 1453.

    I'd place a small Wager that unemployed people will out-number employed people on the inaugural 4G Phone (Device) owners list by the end of the year. I just hope they know that Community Care Grants and Crisis Loans are being abolished next April. I don't feel sorry for the chap I saw in a Pub who had the Crisis Loans Telephone number Tattooed on his left thumb.

  • rate this
    +1

    Comment number 1452.

    10 billion !! , surely it cant cost that much to invade another middle east country.. perhaps i live in the past,, PS, nobody mention Iran, Its supposed to be a surprise

  • rate this
    +3

    Comment number 1451.

    What about those who have to fight for the right to work but their ability is questioned at every turn, I got kicked out a civil service building and management went on ability witch hunt, George did you forget the paralympics or just didnt like the reception, why not just put us back into institutions or gas us, your cetainly on the road to starving those of us that are genuine but try.

  • rate this
    0

    Comment number 1450.

    That money won't their when the discosaurs was around. think with ur brains and did cavemen have money NO! it was man made that their always going to be debt. think it out

 

Page 4 of 77

 

More Politics stories

RSS

Features

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.