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
    +9

    Comment number 1509.

    If you want to expand the size of your family, then fair enough. Just don't expect the government to have a blank cheque book waiting for you. My point being, I work, pay my taxes etc. What gets up my nose is out of work people who think it's their god given right to keep have more & more children & let the rest of us pay for it. I think not!

  • rate this
    +7

    Comment number 1508.

    1486.greyhat

    If only people would get that, but its all short memories and even shorter pockets with the rich.

    A man lives on benefit for 3 years - he's a scoundrel, lazy, a benefit cheat. Sky+, big TV's, cell phones etc.

    Another man makes millions from the destruction of an industry by basically playing roulette, he's a CHAMPION OF THE CAPITALIST SYSTEM! We must ALL pay for his errors.

    Vile!

  • rate this
    +1

    Comment number 1507.

    1427.England is Ruined
    Just now
    The reason there are so few jobs to get benefit claiments off benefits and into work, is because Eastern Europeans are taking these jobs
    for wages our benefit claiments won't even get out of bed for.
    ====
    Maybe we can buy some Eastern European beds???

  • rate this
    +3

    Comment number 1506.

    1251. Bradford

    So many people on this site think that if we stop tax avoidance we can continue pouring throwing money like confetti to welfare claimants, I wonder if you have a vested interest ?
    ---
    try living on 71 quid a week before you make those comments. And no, I do not have a vested interest.

  • rate this
    +5

    Comment number 1505.

    @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."

    You're confusing your averages here. £30k is the mean average wage, but it is skewed by a small number of extremely high earners so "the average worker" earns nothing like as much. What you want is the median wage - about £19K outside London

  • rate this
    +3

    Comment number 1504.

    Stop all foreign aid and put GB citizens first then perhaps the Conservatives wouldn't have to make such drastic cuts in welfare.

  • rate this
    +11

    Comment number 1503.

    So you give up hard fought for rights on unfair dismissal, redundancy and training, and flexible working - for shares in the very company that qould have no qualms in sacking you easily and cheaply. Only someone called Gideon could dream that peach up.

  • rate this
    +4

    Comment number 1502.

    #1483: "'The Rich' have used tax avoidance schemes because they don't want to pay for those who don't contribute"

    I suspect you imply too much rational thought ... in my (limited) experience of dealing with the very rich, they simply don't want to pay, period. I can recall one individual who regarded it as a good deal if he paid his accountant £10K to reduce his tax bill by £5K.

  • rate this
    +2

    Comment number 1501.

    So yet again the poorest in society are worst hit by austerity. When will the rich feel some pain. Maybe in never never land when offshore accounts and non-doms are charged a 95% rate.

  • rate this
    -4

    Comment number 1500.

    Once again I feel stupid for having submitted any comments... the Beeb don't send these comments to Numbers 10 & 11. Even if they did, some Snot would assign them to the nearest Bin. My addition would be:
    1. Scrap Cycle Lanes & Tax Bike Users for using Roads.
    2. Hefty Fines (or Safety Tax) for Bicycle riders who travel on the Pavements.
    3. Abolish the TV Licence
    4.Mirror a U.S Tax returns System.

  • rate this
    -2

    Comment number 1499.

    Bringing back the death penalty would save money in the prisons system and more so if it was backdated. So long as excessive lawyers fees are kept out of the appeals, and decisions made quickly Just thinking.

  • rate this
    -1

    Comment number 1498.

    Osborne does not have a clue he talks the talk but it can't do the walk like the rest of the coalition not at all believable.

  • rate this
    +3

    Comment number 1497.

    I can see MP's who hold seats on lots of boards coining it from handing in rights for shares here. Also the firms will no doubt get a tax break on the shares theyve issued so wonderful potential for creative fiddling.

  • rate this
    +8

    Comment number 1496.

    at least he has'nt mentioned eugenics .........yet.

  • rate this
    +1

    Comment number 1495.

    There would be a really straight forward way to reduce the welfare bill, create tax income & support the economy - create jobs!!
    But as the Tory aim is to make the poor poorer this probably won't happen. Instead propaganda is used to demonise disadvantaged parts of the population.

  • rate this
    +14

    Comment number 1494.

    Dear Mr Osborne. I would like to see the tax records of you and your colleagues please. Until then, nothing you say is relevant at all!

  • rate this
    +8

    Comment number 1493.

    1478. abbey
    22 MINUTES AGO

    Need to hear more stories like this so people realise that not everyone who is unemployed is some lazy ,workshy scrounger. Your brother should never be ashamed or feel depressed because the recession was out of his control. Hope he find something soon

  • rate this
    +4

    Comment number 1492.

    1399.DMJ "what is it that makes them so obsessed with money and care so little for people".
    I agree, they seem to want to return the UK to Dickens' day or even further back to feudalism. Then again, folk still voted them in knowing full well what they stand for. The Hate Mail is the UK's most popular newspaper; HYS comments suggest we tolerant types are now in the minority. Dark times indeed.

  • rate this
    +2

    Comment number 1491.

    Stop moaning everyone. If you want change, hang them all. Voting is as useless as watching X-Factor.. isn't it amazing how you all do both?

  • rate this
    -2

    Comment number 1490.

    Do we have to wait for LABOUR to return to government to get this country working you keep taking from the poor and sick it does not work its the low paid, sick who will build this country because they cause the work not just do the work u can only rebuild this country from tax the rich more its ok they will still be your friend how long until we can vote for a fairer labour

 

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