George Osborne to announce £10bn of welfare cuts

He will tell delegates that another £16 billion of savings will be required in 2015/16 alone and condemn Labour for failing to talk about the deficit at their conference last week.

The speech has been billed as a defence of UK government’s economic strategy by a beleaguered Chancellor. The UK has slid into a double dip recession and Mr Osborne has been forced into a number of U-turns on his budget.

His comments today are likely to put him on a collision course with his Lib Dem coalition partners who said last month that they would not back more welfare cuts without a mansion tax on property worth more than £2 million.

Mr Osborne has dismissed such a move and yesterday he was backed up by Tory Prime Minister David Cameron, who said a mansion tax “is not going to happen.”

Mr Cameron also indicated that in order to protect other services welfare will have to be targeted.

He said: “We have to find these spending reductions and if we want to avoid cuts in things like hospitals and schools - services that we all rely on - we have to look at things like the welfare budget.”

One opponent of the cuts – Work and Pensions Secretary Iain Duncan Smith – has been brought onside and he and Mr Osborne have made a deal where funding for the new universal credit and back to work schemes will be protected. In the reshuffle last month Mr Duncan Smith refused to change job after attempts were made to move him to the justice department to remove opposition to the welfare cuts.

In a joint article tomorrow Mr Osborne and Mr Duncan Smith will say: “We are united in our determination to deliver Universal Credit, the most fundamental reform of our benefits system for a generation, on time and on budget.”

Meanwhile Mr Osborne will also use his speech to attempt to see off criticism that he is helping the rich at the expense of the poor in tackling the deficit.

He will say the Conservatives know what the British people mean by fairness: that those who make the greatest effort get the greatest rewards, and we support those who aspire so that we can help those most in need.

But he will also claim that people know that the cost of paying of the UK’s debts “cannot possibly be borne by one section of society alone.”

He will argue that those with the most should contribute the most but he will defend cutting the top rate of tax for those earning £150,000 or more from 50p to 45p.

He will explain how in every single year of this Parliament the rich will pay a greater share of our nation’s tax revenues than in any one of the thirteen years that Labour were in office. But he will claim the 50p rate was “cripplingly uncompetitive” and “raised no money and cost jobs.”