Osborne to cut another £10bn from benefits

  • George Osborne will announce at the Conservative conference his ideas for cutting a further £10bn from the welfare bill. 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".

    Osborne is expected to will rule out a levy on high-value properties which has been 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, 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.

    Options for Welfare Bill Cuts:
    1. Limiting housing benefit for the under-25s
    2. Further curbs on child tax credits
    3. Benefit increases to be lower than the rate of inflation.

    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:

    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.

    In his speech, 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.

    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.

    Source: BBC News

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