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Osborne gambles over cuts plans Osborne gambles over cuts plans
(9 minutes later)
Shadow chancellor George Osborne has unveiled proposals to tackle Britain's debts - including a public sector pay freeze in 2011.Shadow chancellor George Osborne has unveiled proposals to tackle Britain's debts - including a public sector pay freeze in 2011.
He told the Conservative conference in Manchester that only frontline military and people on less than £18,000 a year would still get rises.He told the Conservative conference in Manchester that only frontline military and people on less than £18,000 a year would still get rises.
He said the freeze would help protect jobs and repeatedly said "we're all in this together".He said the freeze would help protect jobs and repeatedly said "we're all in this together".
And he warned bankers he may tax their bonuses if they were deemed excessiveAnd he warned bankers he may tax their bonuses if they were deemed excessive
Pension capPension cap
Mr Osborne said he wanted to be straight with voters about the scale of cuts needed and repeatedly said that the better-off must take their share of the pain.Mr Osborne said he wanted to be straight with voters about the scale of cuts needed and repeatedly said that the better-off must take their share of the pain.
BBC Political Editor Nick Robinson said the Conservatives' calculated gamble was that they would be rewarded for being open, up-front and honest about the pain that lies ahead. But they know that in the past such a strategy - notably the then shadow chancellor John Smith's tax warning in 1992 - has seen voters "who applaud talk of tough choices tending to howl when those choices hurt them".BBC Political Editor Nick Robinson said the Conservatives' calculated gamble was that they would be rewarded for being open, up-front and honest about the pain that lies ahead. But they know that in the past such a strategy - notably the then shadow chancellor John Smith's tax warning in 1992 - has seen voters "who applaud talk of tough choices tending to howl when those choices hurt them".
OSBORNE'S PROPOSALS Public sector pay freeze in 2011 - except frontline military or people on less than £18,000Keep 50p top tax rate for nowEnd Child Trust Funds for all but the poorest familiesNo tax credits for families earning over £50,000Threat of tax on bank bonusesCrackdown on Whitehall salaries - anyone wanting to pay more than the PM needs Treasury approvalRestore pensions and earnings link Analysis: Osborne's big gamble Send us your commentsOSBORNE'S PROPOSALS Public sector pay freeze in 2011 - except frontline military or people on less than £18,000Keep 50p top tax rate for nowEnd Child Trust Funds for all but the poorest familiesNo tax credits for families earning over £50,000Threat of tax on bank bonusesCrackdown on Whitehall salaries - anyone wanting to pay more than the PM needs Treasury approvalRestore pensions and earnings link Analysis: Osborne's big gamble Send us your comments
But Mr Osborne told the Conservative conference: "I don't believe in balancing the budget on the backs of the poorest."But Mr Osborne told the Conservative conference: "I don't believe in balancing the budget on the backs of the poorest."
His proposed public sector pay freeze goes further than the one announced by Labour on Monday, which will be restricted to GPs, judges and other high earners.His proposed public sector pay freeze goes further than the one announced by Labour on Monday, which will be restricted to GPs, judges and other high earners.
Mr Osborne said the measures contained in his speech would, by the end of the next Parliament, be saving £7bn a year in government spending.Mr Osborne said the measures contained in his speech would, by the end of the next Parliament, be saving £7bn a year in government spending.
He said he could not think of abolishing Labour's new 50% tax rate on the rich "while at the same time I am asking many of our public sector workers to accept a pay freeze to protect their jobs".He said he could not think of abolishing Labour's new 50% tax rate on the rich "while at the same time I am asking many of our public sector workers to accept a pay freeze to protect their jobs".
In a series of measures likely to form the backbone of the Conservative election manifesto, Mr Osborne proposed a freeze on the pay of government ministers and curbs on "excessive salaries at the top of Whitehall".In a series of measures likely to form the backbone of the Conservative election manifesto, Mr Osborne proposed a freeze on the pay of government ministers and curbs on "excessive salaries at the top of Whitehall".
Any new public employee with a salary greater than the level of the prime minister would need special permission from the Treasury.Any new public employee with a salary greater than the level of the prime minister would need special permission from the Treasury.
And he said the time had come to "find ways to impose a £50,000 annual cap on the size of public sector pension payouts".And he said the time had come to "find ways to impose a £50,000 annual cap on the size of public sector pension payouts".
TORY CONFERENCE TWEETS TORY CONFERENCE TWEETS
Twitter: @BBCLauraKTwitter: @BBCLauraK
PCS union tell me they would strike over Osborne's planned pay freeze #cpc09 31 minutes ago just seen Clarke and the rest of Tory business team laughing and smiling backstage after their session finished-they look pleased #cpc09 About 1 hour ago audience now all awake and give Ken Clarke an ovation-#cpc09 About 1 hour ago some party members having a snooze in the audience during ken clarke's speech #cpc09 About 1 hour ago best selling item in the tory shop?baby clothes with tory logo-grooming the next generation already...#cpc09 About 2 hours ago What is this? PCS union tell me they would strike over Osborne's planned pay freeze #cpc09 39 minutes ago just seen Clarke and the rest of Tory business team laughing and smiling backstage after their session finished-they look pleased #cpc09 About 1 hour ago audience now all awake and give Ken Clarke an ovation-#cpc09 About 1 hour ago some party members having a snooze in the audience during ken clarke's speech #cpc09 About 1 hour ago best selling item in the tory shop?baby clothes with tory logo-grooming the next generation already...#cpc09 About 2 hours ago What is this?
He also vowed to cut the cost of Whitehall - proposing to slash departmental budgets by a third during the lifetime of Parliament, a move he said would save £3bn.He also vowed to cut the cost of Whitehall - proposing to slash departmental budgets by a third during the lifetime of Parliament, a move he said would save £3bn.
Tax credits for families earning more than £50,000 a year would be ended and the Child Trust Fund would be limited to the poorest third in society.Tax credits for families earning more than £50,000 a year would be ended and the Child Trust Fund would be limited to the poorest third in society.
But child benefit will be preserved as a universal benefit and the party would not axe the winter fuel payment or free TV licences for pensioners, he said.But child benefit will be preserved as a universal benefit and the party would not axe the winter fuel payment or free TV licences for pensioners, he said.
Mr Osborne also confirmed plans revealed on Monday to bring forward a rise in the age at which people can claim a state pension.Mr Osborne also confirmed plans revealed on Monday to bring forward a rise in the age at which people can claim a state pension.
He also said that in the longer term he would also seek to reverse the "pensions tax raid" imposed by Gordon Brown as Chancellor when Labour first came to power.He also said that in the longer term he would also seek to reverse the "pensions tax raid" imposed by Gordon Brown as Chancellor when Labour first came to power.
Explaining the need for the tough package of measures, Mr Osborne said: "These are the honest choices in the world in which we live and we have made them today.Explaining the need for the tough package of measures, Mr Osborne said: "These are the honest choices in the world in which we live and we have made them today.
"Anyone who tells you these choices can be avoided in not telling you the truth. We are all in this together.""Anyone who tells you these choices can be avoided in not telling you the truth. We are all in this together."
Byrne attackByrne attack
The government has come under fire from public sector unions for its plans to freeze the pay of senior civil servants such as judges and GPs.The government has come under fire from public sector unions for its plans to freeze the pay of senior civil servants such as judges and GPs.
Chancellor Alistair Darling has written to salary review bodies calling on them to freeze the pay of 40,000 senior public servants in 2010/11.Chancellor Alistair Darling has written to salary review bodies calling on them to freeze the pay of 40,000 senior public servants in 2010/11.
He also recommended that about 700,000 middle-ranking public servants, including doctors, dentists and prison officers, get a rise of between 0 and 1%.He also recommended that about 700,000 middle-ranking public servants, including doctors, dentists and prison officers, get a rise of between 0 and 1%.
Mr Osborne attacked Mr Darling for "sneaking out" the announcement during the Tory conference saying "he didn't have the guts to announce it to the Labour Party conference".Mr Osborne attacked Mr Darling for "sneaking out" the announcement during the Tory conference saying "he didn't have the guts to announce it to the Labour Party conference".
But Liam Byrne, chief secretary to the Treasury, said: "George Osborne appears intent on talking Britain down. We were told his speech would tell us 'everything' we needed to know about how the Tories would get the deficit down. But he lost his nerve.But Liam Byrne, chief secretary to the Treasury, said: "George Osborne appears intent on talking Britain down. We were told his speech would tell us 'everything' we needed to know about how the Tories would get the deficit down. But he lost his nerve.
"How can George Osborne say 'we're in this together' and then recommit his party to a tax giveaway to the wealthiest 3,000 estates?""How can George Osborne say 'we're in this together' and then recommit his party to a tax giveaway to the wealthiest 3,000 estates?"