George Osborne sets out shadow budget
George Osborne has set out ambitious proposals to deal with the economy
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By Matt Hallam. |  |
Tuesday, 06, Oct 2009 10:00
By Matthew West
George Osborne has set out plans for a series of spending cuts under the theme of a "saving society" should the Conservative party win the next general election.
In a speech which called for austerity, the shadow chancellor said Britain needed to return to being a saving society saying this was the "modern Conservative approach to putting Britain back on the right financial track".
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"We want to turn an economy that borrows into one that saves.
"At every stage we will support the culture of saving, and for those who show responsibility for themselves and others," he said
Mr Osborne said a Conservative government would make billions of pounds in efficiency savings by cutting Whitehall bureaucracy by one third. He claimed such efficiency savings and improved productivity would save more than £3 billion a year in government spending.
But the shadow chancellor also claimed savings in public spending could be implemented without harming front line public services adding the Conservatives were "now the party of the NHS" and that the public sector pay freeze in 2011 would protect 100,000 jobs.
Military personnel on active service overseas would also be excluded from any pay freeze with Mr Osborne promising to double the operational allowance for those on active duty overseas to an average of £4,800 for a six month tour of duty.
The shadow chancellor mentioned the dreaded 'C-word' - cuts - 12 times while supplementing it for savings and saved 17 times during his speech.
He also confirmed savings of £13 billion a year would be made by a Conservative government by raising the state pension age to 66 by 2016 for men and 2020 for women.
The shadow chancellor also promised stop child trust funds for better off families. But he said disabled children and the poorest one third of families would still continue to receive both new child trust funds at birth and top-up payments. Again the emphasis was on saving with the Conservatives pointing out this move would save £300 million a year or £1.5 billion over the next parliament.
Meanwhile, the Tories would stop paying tax credits to households with incomes over £50,000 by means-testing the family element of the child tax credit at a lower threshold. Again he claimed this would save £400 million a year or £2 billion over the next parliament
He also confirmed a Tory government would cut benefits by up to £25 a week for anyone currently receiving incapacity benefit who fails a new work test and is therefore entitled only to jobseekers allowance.
He claimed this would save more than £1 billion over the next parliament, of which £600 million should be used to help get the unemployed back into work.
But the shadow chancellor shied away from committing to cut the new 50p tax rate for the highest earners immediately after a Conservative victory at the next election saying this should stay in place at least as long as the public sector pay freeze.
And he also committed the Conservative to re-linking the state pensions to wages inflation during the next parliament.