George Osborne attempted to mark his government out as radical, reforming and tough on Monday, in a speech that outlined plans to slash the welfare budget by £10bn and bring in changes that would allow some workers to swap employee protections for shares.
The chancellor told the Birmingham conference that employees would be able to take part in a voluntary deal, allowing them to swap employment rights for shares in their company.
“Workers of the world unite!” he declared.
In a speech that was conspicuous for its omission to mention any Liberal Democrats, Osborne said the Conservatives would be the government for “people who aspire.”
He signalled that there would not be any retreat from Plan A, despite Britain’s double dip recession. “We will finish the job we have started,” he said, although he acknowledged it was “taking longer than we hoped.”
Clegg told his party’s conference last month that he would not allow “wild suggestions” of a £10bns cut in welfare, said on Monday that nothing “in detail has been agreed on cuts to welfare.”
“The Conservatives are, of course, perfectly entitled to set out their stall about what we do as a country as we have to tighten our belts further, as we indeed were at our party conference.”
Liberal Democrat former MP and vice-chair of the Liberal Democrats federal policy committee Dr Evan Harris told The Huffington Post UK there was a “big argument” going on in government about where cuts should fall.
“There’s already a big argument going on in government and in conferences and in the media about what the ratio should be about the wealthy paying more and cuts in government spending,” Harris said.
“Both parties agree to deficit reduction. The Conservatives have ruled out every single tax that’s been proposed on the wealthy. The implication is they want working families to bear the brunt,” he said.
But on Monday, Osborne told his party’s conference extra £10bn of welfare savings would be made by the first full year of the next parliament, hinting this would come partially from cutting housing benefits for the under 25s. “How can we justify the incomes of those out of work rising faster than the incomes of those in work?”, he asked.
“How can we justify giving flats to young people who have never worked, when working people twice their age are still living with their parents because they can’t afford their first home?
“How can we justify a system where people in work have to consider the full financial costs of having another child, whilst those who are out of work don’t?”
Under Osborne’s shares for rights policy “employee-owners” will receive between £2,000 and £50,000 of shares that will be exempt from capital gains tax when sold, and in return will give up rights on unfair dismissal, redundancy and the right to request flexible working and time off for training.
The British Chambers of Commerce said Osborne’s policy announcement was “imaginative” but warned: “The Chancellor’s announcement of a new form of business ownership, with individuals swapping greater employment flexibility for an equity stake in the company, could be a useful option for some new and fast-growing businesses. It is an innovative and imaginative proposal that deserves to be tried out, but it is unlikely to be a game-changer,” its director John Longworth said.
Shadow chief secretary to the Treasury Rachel Reeves labelled Osborne’s speech “defensive”, saying it “didn’t once mention that his policies have seen a double dip recession, one million young people out of work and, as a result, the deficit going up by 22 per cent so far this year. And he failed to set out any policies to deliver the jobs and growth we need to get the deficit down.”
Osborne also outlined £200m in state funding for scientific research, as part of the Government’s efforts to inject growth into the British economy.
The cash will triple to £300 million the Research Partnership Investment Fund (RPIF), which supports university capital projects and has been heavily over-subscribed since its launch in the Budget.
Universities bidding for the cash must deliver at least double the public funding with contributions from industry or charity, producing a total £1 billion in additional money for science.