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| George Osborne proposes two year benefits freeze | George Osborne proposes two year benefits freeze |
| (34 minutes later) | |
| A future Conservative government would freeze benefits paid to people of working age for two years, Chancellor George Osborne has told the Conservative Party conference. | A future Conservative government would freeze benefits paid to people of working age for two years, Chancellor George Osborne has told the Conservative Party conference. |
| Mr Osborne said the proposed freeze, which would not include pensions, disability benefits and maternity pay - would save £3 billion. | Mr Osborne said the proposed freeze, which would not include pensions, disability benefits and maternity pay - would save £3 billion. |
| It would come into effect in 2016, if the Tories win the next election. | |
| Labour said Mr Osborne was standing up "for the very wealthiest few". | |
| In his speech to the conference, Mr Osborne said it would be "a serious contribution to reduce the deficit". | In his speech to the conference, Mr Osborne said it would be "a serious contribution to reduce the deficit". |
| The chancellor also pledged to scrap the 55% cent tax rate on inherited pension funds. | The chancellor also pledged to scrap the 55% cent tax rate on inherited pension funds. |
| And he pledged to "put a stop" to the "extraordinary lengths" to which he said some technology companies went in order to avoid paying tax. | And he pledged to "put a stop" to the "extraordinary lengths" to which he said some technology companies went in order to avoid paying tax. |
| "If you abuse our tax system, you abuse the trust of the British people," he said. | "If you abuse our tax system, you abuse the trust of the British people," he said. |
| "And my message to those companies is clear. We will put a stop to it. Low taxes, but low taxes that are paid." | "And my message to those companies is clear. We will put a stop to it. Low taxes, but low taxes that are paid." |
| An extra £25bn of permanent savings would be needed to eliminate the UK's deficit, Mr Osborne said. | An extra £25bn of permanent savings would be needed to eliminate the UK's deficit, Mr Osborne said. |
| He told delegates: "The option of taxing your way out of a deficit no longer exists, if it ever did." | He told delegates: "The option of taxing your way out of a deficit no longer exists, if it ever did." |
| Britain had the fastest-growing economy of any developed nation, the chancellor said, but he was not "marvelling" at what had been done. | Britain had the fastest-growing economy of any developed nation, the chancellor said, but he was not "marvelling" at what had been done. |
| "We here resolve that we will finish the job that we have started," he said, saying Britain's national debt was still "dangerously high". | "We here resolve that we will finish the job that we have started," he said, saying Britain's national debt was still "dangerously high". |
| Analysis: Nick Robinson, BBC political editor | |
| There is nothing George Osborne likes more than making twin pack announcements designed to make him look tough but fair. | |
| So it is that he has just announced that a future Conservative government would freeze benefits paid to people of working age for two years at the same time as what will quickly become known as the "Google Tax" - a crackdown on what accountants and tax lawyers call the double Irish arrangement - a tax avoidance strategy that multinational corporations use to lower their corporate tax liability first used by Apple. | |
| Read more from Nick | |
| Mr Osborne said it was a "dangerous fallacy" that the link between economic prosperity and people's personal finances had been broken. | Mr Osborne said it was a "dangerous fallacy" that the link between economic prosperity and people's personal finances had been broken. |
| The welfare freeze would include Jobseeker's Allowance, Income Support, Child Tax Credit and Working Tax Credit, Child Benefit and Employment Support Allowance, paid to those judged capable of work. | |
| The 55% tax currently applies to untouched "defined contribution" pension pots left by those aged 75 or over, and to pensions from which money has already been withdrawn. | The 55% tax currently applies to untouched "defined contribution" pension pots left by those aged 75 or over, and to pensions from which money has already been withdrawn. |
| Inheritors will now only pay the marginal income tax rate, or no tax at all if the deceased was under 75 and the pension is left untouched. | Inheritors will now only pay the marginal income tax rate, or no tax at all if the deceased was under 75 and the pension is left untouched. |
| The Treasury predicts the new policy will cost approximately £150m per year. | The Treasury predicts the new policy will cost approximately £150m per year. |
| The idea was first floated in July, when a consultation was launched. | The idea was first floated in July, when a consultation was launched. |
| Analysis: Simon Gompertz , BBC personal finance correspondent | Analysis: Simon Gompertz , BBC personal finance correspondent |
| The end of the 55% tax charge will be a significant gain for some. | The end of the 55% tax charge will be a significant gain for some. |
| But the question Mr Osborne will have to answer is whether he is creating a way for better-off savers to escape tax. | But the question Mr Osborne will have to answer is whether he is creating a way for better-off savers to escape tax. |
| They will have an incentive to use money stored in bank accounts and investments before dipping into the pension pot. | They will have an incentive to use money stored in bank accounts and investments before dipping into the pension pot. |
| The reason? The pension will become a way of protecting up to £1.25m from some or all tax after death. | The reason? The pension will become a way of protecting up to £1.25m from some or all tax after death. |
| Those on lower incomes, who can't save much, and need the money during retirement, have not been in danger of paying the 55% and are unlikely to benefit from its removal. | Those on lower incomes, who can't save much, and need the money during retirement, have not been in danger of paying the 55% and are unlikely to benefit from its removal. |
| Some experts say the Osborne reforms turn pension saving on its head. | Some experts say the Osborne reforms turn pension saving on its head. |
| The point used to be to spread your income over your lifetime. | The point used to be to spread your income over your lifetime. |
| In future, pensions could become a method of preserving savings beyond the grave. | In future, pensions could become a method of preserving savings beyond the grave. |
| The government estimates that the scrapping of the 55% rate is likely to affect 320,000 people. It is the latest in a string of changes to pension regulations introduced by George Osborne. | The government estimates that the scrapping of the 55% rate is likely to affect 320,000 people. It is the latest in a string of changes to pension regulations introduced by George Osborne. |
| In March's Budget, the chancellor announced that pensioners would have the freedom to cash in as much or as little of their pension pot as they wanted, removing the need to buy an annuity. | In March's Budget, the chancellor announced that pensioners would have the freedom to cash in as much or as little of their pension pot as they wanted, removing the need to buy an annuity. |
| The latest measure will apply to all inherited pensions received from April 2015. | The latest measure will apply to all inherited pensions received from April 2015. |
| The beneficiaries of anyone who dies before that date may also benefit from the tax cut, if payment is delayed until after the new policy comes into effect. | The beneficiaries of anyone who dies before that date may also benefit from the tax cut, if payment is delayed until after the new policy comes into effect. |
| It says 12 million Britons have some form of defined contributions pensions saving. | It says 12 million Britons have some form of defined contributions pensions saving. |
| Spouses and financially dependent children under the age of 23 are already exempt from the 55% tax, but the new policy introduces the following changes: | Spouses and financially dependent children under the age of 23 are already exempt from the 55% tax, but the new policy introduces the following changes: |
| For Labour, Chris Leslie, shadow chief secretary to the Treasury, said Mr Osborne had "said nothing about the squeeze on real earnings". | |
| What is your reaction to George Osborne's proposals? You can email your comments to haveyoursay@bbc.co.uk | What is your reaction to George Osborne's proposals? You can email your comments to haveyoursay@bbc.co.uk |