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
    0

    Comment number 1529.

    osbourne seems to take genuine pleasure from his plans to make the poor,needy and disadvantaged even more impoverished.
    what a truly awful,twisted excuse for a man!

  • rate this
    +1

    Comment number 1528.

    I'm afraid there is no hope for humanity if we continue to use the Monterey system,in the words of John Lennon " some say I'm a dreamer but I am not the only one ". But how do we live without money when the greedy and the immoral will take and manipulate everything , there is too many people for money to work and the system is failing for the rich to hold on .

  • rate this
    +7

    Comment number 1527.

    Foreign aid is set to increase to £10bn. Handouts within the country to be cut by £10bn. Coincidence?

  • rate this
    0

    Comment number 1526.

    benefits should be capped, an for the new claimants it should be abolished until they put something into the system first. Why should they live better than those working 7 days a week? And why did they get a benefit rise when most employees got a pay cut or no rise at all?

  • rate this
    +5

    Comment number 1525.

    please enter, 'Cameron's dad tax avoidance' read the article 5 down. you will see if tax avoidance was stopped and businesses no longer had offshore accounts there would be no budget deficit

  • rate this
    +3

    Comment number 1524.

    I m a pleb and proud,i work as a nurse. I am a caring individual enough and i am intelligent enough not to fall for what this government is doing-trying to make out that all benefit claimants are scroungers- i have family out of work who find a job and are trying hard to find work. The government have shown that they are a nasty lot!!

  • rate this
    +7

    Comment number 1523.

    1366. bign
    2 MINUTES AGO
    Give all benefits claimants the equivelent of 40 hours at minimum wage instead of the obscene amounts they get now. Let them live like the majority of people have to!!

    I receive benefits, as I am unable to find employment. I receive considerably less than that. Learn the facts mate.

  • rate this
    +4

    Comment number 1522.

    Its about time the government started looking at those who have neaver worked and those that come here not to work but claim money to live,
    Instead of punnishing us that work hard pay taxes and keep going even when there has been no pay rises for years but cost of living keeps rising.
    But then we are the soft target for them. Lets look to our own before we give to others.

  • rate this
    -5

    Comment number 1521.

    People suggesting that the Conservatives aim is to destroy society are just being silly. Why would anyone set out to do this? It isn't in their or anyone else's interests. Stop being so paranoid. The difference is that they are looking for alternatives to the Labour approach of just throwing money into a hole until there is a global upturn to save the day.

  • rate this
    0

    Comment number 1520.

    abolish child tax credits and working tax credits all together and offer a living wage to the workers,Companies have used the tax credit system to keep wages low ,
    so well done labour another nail in the coffin of the workers you are responsible for ,we applaud you stupidity,,
    end all tax credits now and start to rebuild our country with hard work and a stiff upper lip
    and not a Mardi left one

  • rate this
    +3

    Comment number 1519.

    All the tories have done at this conference it seems is attack the poor. £10B cut to welfare and IDS blaming broken families, drink/drug addicts and the riots on those on benefits and Labour.

  • rate this
    -4

    Comment number 1518.

    1492.FatPeace

    "HYS comments suggest we 'tolerant' types are now in the minority. Dark times indeed."

    Oh _really_? ?

    I suggest you check the highest/lowest voted comments. I think you will find that on HyS the progressive 'tolerant' types like yourself actually outnumber people with an understanding of economics by a large margin. Fortunately not a reflection of the whole country!

  • rate this
    +5

    Comment number 1517.

    The 'rich' are the only tax dodgers according to many posters - well there are over 6Million self-employed brickies, chippies, plasterers, cab drivers, decorators etc etc - and I've never met ONE who declares their full earnings for tax purposes.

  • rate this
    0

    Comment number 1516.

    Interesting - "the budget could not be balanced on the wallets of the rich" but it seems it can be balanced on the wallets of the poor.
    "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. - Really? Most of us have homes worth 2 million+, it just shows how out of touch these people are.

  • rate this
    -1

    Comment number 1515.

    1485 Eddy from W. Agree. The police seem to admire what they call scoundral/petty thieves/crooks. The Criminal Investigation Dept needs renaming to Criminal admiration Dept. I know from experience as they seem to find it acceptable for some of our goods to be sold at a boot sale. The person didnt deny he had them, no prosecution tho.

  • rate this
    +3

    Comment number 1514.

    If you receive your redundancy pay off in shares what are you supposed to live off while you are looking for work???
    Oh silly me, I guess you are expected to use the thousands you have stashed away in the bank!! Unfortunately latest figures suggest the average Joe has around £1500 in savings, enough for two months rent.
    at current costs, so I guess you will have to go on benefits eh!!

  • rate this
    0

    Comment number 1513.

    "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"

    As anyone can see everything the government touches turns into poo. Government has suspended the free market and weighted the balance in favor of a few of it's chosen darlings. Nothing will be sorted until government stops intervening in markets

  • rate this
    +9

    Comment number 1512.

    466.
    Chris
    3 Hours ago

    @the-mogg

    You are correct, to many lazy, good for nothing wasters, who have been living on benefits for far too long. Its not that there is not enough jobs out there, its that these jobs are, not good enough for them.

    -----

    Oh for goodness sake, the ONS state that there are 400,000 jobs on offer while there are 2.68 million unemployed. Don`t they teach maths at Eton?

  • rate this
    +4

    Comment number 1511.

    @1462. Stunned_Silence

    That was my point, salaries are too low and if you get paid a half decent wage, its taxed heavily.
    Is £40k, £50k or £60k a high salary? How does someone earning that not pay their fair share when they are a net contributer and receive less?

  • rate this
    +10

    Comment number 1510.

    What is wrong with us as a people ? Why on Earth are we letting ourselves be governed by rubbish like this?

 

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