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
    +4

    Comment number 1489.

    "1426.Fred Bloggs
    The national average wage is around £30,000 P/A, so it would take an average worker 5 years to earn £150,000 not 13. "

    Beware averages - there are a hell of a lot more people on or near minimum wage than average wage, so for most the 13 multiplier, or thereabouts, applies.

    http://www.guardian.co.uk/society/datablog/2012/jun/22/household-incomes-compare

  • rate this
    +8

    Comment number 1488.

    Easy way to cut the benefit bill,

    Create an environment where jobs are created and let people in this country have them (no importing cheap labour from abroad).
    That way less people claiming the dole, more people paying tax a win win situation.

    Pity Dave & George didn’t learn this at Eton, probably too busy learning how to despise the poor.

  • rate this
    +11

    Comment number 1487.

    I feel really sorry for those who have fallen on hard times and have to rely on the state for survival the truth is for the most of us there by grace of god go we.
    But watching Cameron & Co and knowing no matter what above everything else they personaly hate you it must be like getting a cold call from an undertakers.

  • rate this
    +4

    Comment number 1486.

    now is a good time to remeber why we are in such debt the tory party would have us forget that it was banking that caused our present problems because most of our tory millionairns are paid by them nor paid tax this year
    Government debt £550 billion
    Repayable national debts by banks £480 billion
    National Debts/losses incurred via banking fiasco £200 billi
    TOTAL National debt £1230 billi

  • rate this
    +4

    Comment number 1485.

    If only some people were a bit lazier.

    It's the many who are energetically pursuing a life of crime, whether metal thieves, burglars or fraudulent bankers who are really costing us, especially to keep in prison if we do catch them (except bankers of course).

  • rate this
    0

    Comment number 1484.

    Sorry Crazyrock @1470

    I couldn't agree with you more.The point is that they don't - the contributions are no where near enough to pay for the pensions. If I am wrong then why doesn't the whole of the public sector move to a contribution based scheme like nearly the whole of the private sector is subject to?

  • rate this
    -6

    Comment number 1483.

    'The Rich' have used tax avoidance schemes because they don't want to pay for those who don't contribute, who could or to pay for those who have bigger families than they can afford to support.

    At least we get something out them now. Do you really think Gary Barlow couldn't move to Monaco?

    So we need to cut unecessary welfare now and make it attractive for businesses and 'the rich' to stay.

  • rate this
    +7

    Comment number 1482.

    You get a load of "shares" in exchange for your working rights. You get screwed into the ground for however many working years & when the Board see the shares maybe about to produce value or divided, they bankrupt the business & walk away with it all. Bit like the 80's British Gas share issues for plebs were rationed & oversubscribed we made £200 on them. Leaders & financiers made Billions.

  • rate this
    +3

    Comment number 1481.

    it is time we clamped down on benefits, , first we should ensure that only citizens get benefits while we welcome those who come to our country to work if they have no job i see no reason why if they are not citizens we should be supporting them, if unable to support themselves and cannot find work within a month they should be leave, many come work for a short while then live on benefits forever

  • rate this
    +11

    Comment number 1480.

    Thanks George, you cleared up one problem for me.

    Next election, I'll hold my nose and vote Labour. Of all the parties standing with a hope of being a government, they are probably the least bad option. They may be incompetent, but they are not also as deliberately self-serving, greedy, and toxic to the poorest as you are.

  • rate this
    +12

    Comment number 1479.

    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"

    Man is barking! We're closing the firm, you gave up redundacy rights and by the way as we've gone under your shares are worth nothing!

  • rate this
    +21

    Comment number 1478.

    Last night my brother sounded so low. Since losing his job three years ago, he's applied for 200 jobs, approaching each with hope and enthusiasm. He's reliable, hard-working, honest, kind. But he's socially awkward - a (mild?) learning disability that has made life a struggle.. But struggle on he has. Now Osborne is going to make his desperate effort to live with dignity even harder.

  • rate this
    +6

    Comment number 1477.

    Please enter ,'Cameron's dad tax avoidance' on google website. About 5 articles down read the Guardian article. I know its a bit long but they use the governments own figures. These show if tax wasn't avoided and corporations were not allowed to have offshore accounts there is no budget deficit. The pasty tax etc are there to cloud the issue and the media circus help them do this.

  • rate this
    +2

    Comment number 1476.

    I agree funding poor people while they produce sprog after sprog is less than ideal, but it seems ridiculous that a child born to poor parents should face even more of a disadvantage than is already the case. It's hard enough to fight your way up the class ladder as it is.
    I used to think we were lucky to be born in the UK, that isn't the case for the 4th child of a couple on minimum wage.

  • rate this
    -4

    Comment number 1475.

    My question is: why hasn't the government made the cuts already, what are we waiting for? We cannot continue to borrow more and more.
    It needs repeating that Gordon Brown got us into this mess, it will take many years to put right so the sooner we start the better.

  • rate this
    -1

    Comment number 1474.

    According to the BBC the 50% top rate of tax affected 275,000 earning over £150k: raising an extra £8 Bn. 50% was a calculated piece of PR introduced to quell the baying left wing mob and their 'Union Paymaters'! In reality it is still being used as a tool of Class hatred although much more akin to wealth hatred & envy given that the UK rich list is not overflowing with Old Etonians!

  • rate this
    +9

    Comment number 1473.

    1416. McGill
    “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."

    Osbourne went on to say that proposals for getting the rich to pay their due would be announced just before the election; a pleb vote catcher I assume.

    Notice how ways of robbing the poor don't have to wait for any election. I wonder why? Duh!

  • rate this
    +6

    Comment number 1472.

    let me get this straight, Osbourne says tax on the rich will be increased in some form in the next few years at some point but for now he`ll hammer the poorest in society with immediately. Him and his party have no intention of helping the hardest working in this country, instead he`ll make sure his rich buddies and tory faithful will not get touched by his austerity measures. Nasty little man.

  • Comment number 1471.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +1

    Comment number 1470.

    #1429. ShatnersBasoon

    If you pay the cost of the pension, you deserve the benefits.....Who ever you are.....,

 

Page 3 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.