Osborne unveils tidal wave of policies

By Ian Dunt

George Osborne has unveiled a tidal wave of policies during his keynote conference speech in Manchester.

The shadow chancellor tackled the debt crisis debate head on, with a slew of commitments and admissions of pay freezes and cuts.

The government should recommend no headline increase in pay for all public sector workers in 2011, Mr Osborne announced. But he exempted those earning less than £18,000.

“I don’t believe in balancing the budget on the backs of the poorest and nor do you,” he told delegates.

The announcement prompted instant derision from Britain’s trade unions.

Unison general secretary Dave Prentis said: “It’s clear that the Tories want to use the economic recession as a stick to beat ordinary hard-working people.

“The shadow chancellor has wrapped up public sector cuts, public sector pay freezes, a rise in retirement age and
reduced pension rights in warm words that will ring hollow with Britain’s army of public sector workers.”

Mr Osborne confirmed he would not undo the new 50p tax rate on the rich while asking public sector workers to accept hardships.

New baby bonds to the well off will be scrapped, and means-tested credits to families earning over £50,000 will also be gotten rid of.

Child benefit, winter fuel payments and free TV licenses would be preserved. “They are valued by millions,” Mr Osborne said.

He also confirmed the Tories were sticking with their commitment to reform of inheritance tax.

The shadow chancellor confirmed reports that the state retirement age would rise to 66 ten years earlier than planned, saving £13 billion a year from 2016.

That prompted an unexpected attack from the Liberal Democrats, who all but described the proposals as sexist.

Lib Dem pensions spokesman Steve Webb said: “Women have been a total afterthought to this announcement. It is simply impossible for the Tories to save £13bn a year by raising the state pension age for men alone.

“George Osborne’s plans would require the pension age for women to increase each year until 2016. The Tories must come clean or risk leaving every woman in the country in a pensions limbo.”

He continued: “The Tories still seem to think that as long as women have husbands they don’t need to worry about their pensions.”

Ministerial pay would be cut by 5 per cent, Mr Osborne announced, while the number of MPs would be cut by 10 per cent. The commitment to Westminster cuts spearheaded the theme of the speech – “we are all in this together”. Mr Osborne reiterated the phrase several times in the speech.

Parliament will lose its “unaffordable pension scheme”. Whitehall costs would be cut by a third and £3 billion saved in efficiency savings, he claimed.

His attacks on the Labour government were savage. He began by severely criticising Alistair Darling for announcing a freeze or minimal rise in senior public sector pay in the middle of a Tory party conference.

Warning delegates that Britain is “sinking in a sea of debt”, the shadow chancellor berated Mr Brown for offering more unfunded commitments in his leader’s speech in Brighton last week.

“The iron chancellor has turned into the plastic prime minister,” he said.

Also addressing the conference today is Kenneth Clarke, shadow business secretary, who is being carefully managed by party officials to ensure he stays on-message.

Mr Clarke returned to the political front line earlier this year, but has adopted a low-key profile over the summer.

With talk of divisions on the subject of the Lisbon treaty dominating the conference, Tory HQ will be hoping the famously pro-European former chancellor does not make life any harder for David Cameron as he tries to prevent infighting.