George Osborne Attacks Welfare Again Plays to the Right Wing Gallery

There was a standing ovation for Chancellor George Osborne as he finished his Conservative party conference speech in Birmingham, but the welfare dependent were left on the floor having had the carpet pulled out from underneath them.

He will slash welfare spending by a further £10bn in the next couple of years, as he struggles to bring down the deficit and looks set to miss his public debt obligations, with most of the axe's swings falling on housing and child benefits.

Osborne cited an inherent unfairness in people going out to work hard for their pay, only for it to be taxed so it can subsidise the lives of those who do not work while they themselves struggle to get by.

"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?" asked Osborne in his speech.

Understandably, given the wider economic context of recession, this speaks loudly to the millions of everyday working Britons facing an uphill struggle to make ends meet.

However there is an unpalatable aftertaste to Osborne's caricature of someone out of work. He has flavoured them as lazy, feckless, baby-machines who opt for a life of sloth, luxury and excessive fertility at the taxpayer's expense.

This is a not the case for the majority of those who are unemployed. Many people have lost their jobs since the financial crisis in 2008 - a collapse caused by the greed of the money elite and world governments - and are now struggling to find work.

Others have been let down by successive governments who have failed to intervene at the bottom of society and solve the many problems of these victims of circumstance, whose personal backgrounds feature deprivation and dismal education, leaving them with no skills or prospects for the future.

In the great baby lottery, not everyone can be born heirs to a 380-year-old baronetcy.

This underclass is often portrayed in the media as benefit scroungers who have made a certain choice in life, when really those in charge made this choice for them by turning their backs, using society's bottom layer as a politically expedient scapegoat instead of turning their lives around.

The message from many politicians is clear: Never mind the tax-dodgers at the top of society, lots of whom just so happen to have their moneyed tentacles wrapped around Britain's lawmakers, it is the tax-thieves at the bottom who middle England should focus their scorn on.

Really though it is these people who need our pity and help. Slashing child benefit will just perpetuate the problems and leave another generation of children struggling in abject poverty, eventually to start the cycle again by having their own children.

What they need is intervention and investment to help lift them out of poverty and ensure they have the education and skills necessary to get on in life, rather than placing yet more hurdles in their way so they and their offspring continue to drain the system of resources. Cutting welfare is self-defeating.

There is also an economic argument to be made against slashing welfare payments. Recipients of benefits are not savers, they are spenders. What comes in goes out again and feeds the local economy by driving business.

At a time when consumer confidence is so low, keeping demand pinned down, and many firms who rely on domestic consumption are feeling the pinch, limiting the spending power of a portion of society will do nothing to help heal this crippling lull in demand.

No fault dismissal for company shares

There was also a concerning announcement over employment law. Osborne will introduce the option for workers to waive certain employment rights - such as in redundancy and no-fault dismissal - in exchange for shares in the firm where they work.

As an added incentive, employees who sign up to this scheme will be exempt from capital gains tax on any profits their shares yield.

But will there really be any interest in this scheme?

Waiving your employment rights ensures one thing: uncertainty.

Employers could dump you at a moment's notice and all you'd have is a share certificate to cry into. Unless you had a stockpile of savings, your bills will go unpaid and you could be plunged into a personal financial crisis.

Who would be mad enough to take such a risk? Is it right to let employers tempt their employees out of their rights? Could it be used cynically to easily push those they want to fire, but do not have good reason to, out of the door?

At least worker co-operatives, such as the John Lewis Partnership, let you keep your hard-won employment rights when you become a staff owner in the company.

No wealth tax

Osborne promised that he will make the richest in society pay more and it will not be the poorest shouldering all the burden of bringing down the deficit.

However he did not tell us how he would do this. Rather he focused on exactly how he would not.

In defiance of his coalition partners the Liberal Democrats, Osborne said there will be no wealth tax on his watch.

Wealth creation should not be "punished" with a tax, said Osborne, and dismissed the Lib Dems' calls for a mansion tax on properties worth more than £2m.

"It's not a mansion tax, it's a homes tax and this party of property ownership will have no truck with it," he said.

It is telling that Osborne will reveal where the welfare cuts shall fall, but he will not give detail on how he plans to tax the wealthiest to make sure everyone pays their fair share.

What is also revealing, and probably galling for the middle earners across the country, is that he uttered not one single word on how to tackle the serious issue of tax avoidance in Britain, which costs the Treasury billions in lost revenues. Instead he lauded his tax cuts for businesses and top earners.

Overall Osborne's speech will go down well with the party faithful, some of who were starting to doubt his chancellorship with the worsening domestic recession, and his playing to the prejudices on welfare of middle England will also score some political points.

However, for all his bluster and rhetoric on his handling of the economy, his mainstay claim of "credibility" will be destroyed if the cold economic data does not start getting better.

For most of us it is the numbers, not words, that count.