Osborne in £10bn benefit cut vow

Written By Unknown on Senin, 08 Oktober 2012 | 16.50

8 October 2012 Last updated at 04:59 ET By Brian Wheeler Political reporter, BBC News in Birmingham

The government is determined to cut a further £10bn from the benefits budget to fight the deficit, Chancellor George Osborne will tell the Tory conference.

One idea he will suggest is limiting the number of children in a family that should be supported on benefits.

Mr Osborne told the BBC the better-off would have to pay more in taxes, but the budget could not be balanced "simply on the wallets of the rich".

He will rule out a levy on high-value properties sought by Lib Dems.

The chancellor will promise to cut £10bn more from the welfare bill by 2016-17, on top of the £18bn cuts announced in 2010, as the economic downturn lasts longer than expected.

In his address, Mr Osborne is expected to say: "Let the message from this conference be clear: we will finish the job we have started."

'Large bill'

He will tell delegates that "the economy is healing" but add that "healing is taking longer than we hoped, because the damage was greater than we feared".

Mr Osborne will spell 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.

Continue reading the main story
  • It is forecast 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
  • Source: The Office for Budget Responsibility

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 is expected to rule out such a measure, which is unpopular among Conservative MPs.

But he told BBC Radio 4's Today programme that taxes for the most well-off would be increased in some form "in the years ahead", saying: "The rich need to contribute more. But you can't just balance the budget on the wallets of the rich.

"We've got to look at a very large welfare bill and find savings there. The rich are paying more in tax than they did in any one year of the last Labour government."

But he added that this would not, on its own, be enough to eradicate the deficit.

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.

In his speech - expected shortly before noon - the chancellor will say a further £16bn of savings must be found in 2015/16 alone to meet his target of balancing the UK's budget within five years.

Mr Osborne is keen to present 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.

George Osborne

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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.

In his speech, Mr Osborne will accuse 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 will also announce an extra £200m in government funding for scientific research in English universities.

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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