George Osborne has delivered his keynote speech at the Conservative party conference in Birmingham.
The Chancellor told the assembled delegates that they were still, "all in it together," and that he was right to cut the 50p tax rate.
ITV News Political Correspondent Libby Wiener reports from Birmingham:
Mr Osborne acknowledged that the economic recovery was taking longer then he had foreseen:
The deficit is down by a quarter, there are 1 million more private sector jobs.
The economy is healing, that healing is taking longer than we hoped, the damage is greater than we feared.
We will finish the job that we have started.
He also confirmed earlier speculation that the Conservative party will not support the Liberal Democrat policy of a 'mansion tax' on homes worth more then £1 million, saying, "t would be sold as a mansion tax, but once the tax inspector has his foot in the door you'd soon find most of the homes in the country labelled a mansion. It's not a mansion tax it's a home tax and this party of home ownership will have no truck with it."
The Chancellor also said that introducing fairness to society would mean fairness across the welfare state:
It is not just about the money, it comes back to fairness and to enterprise. How can we justify the incomes of those out of work rising faster than those in work?
How can we justify giving flats to young people who've never worked, when working people twice their age are still living with their parents because they can't afford their first home?
How can we justify a system were people in work have to consider the full financial costs of having another child while those out of work don't?
Mr Osborne went in to more detail when revealing a new plan to radically change employment law. He put forward an idea for new, small and medium sized businesses to give employees shares in exchange for their unfair dismissal and redundancy rights. The shares would be 100% capital gains tax free, making it, what Mr Osborne called a "three-way deal."
Workers would be given the opportunity to give up employment rights in return for shares in their company.
The new "employee-owners" will receive between £2,000 and £50,000 of shares that will be exempt from capital gains tax when sold, and in return will give up rights on unfair dismissal, redundancy and the right to request flexible working and time off for training.
While Mr Osborne said it would appeal to new businesses starting up and small and medium-sized firms who need flexible labour and highly motivated staff, aides said the voluntary scheme will be open to any limited company.
They expect hundreds of thousands of employees to sign up within the next few years, at a cost to the Treasury of around £100 million in lost capital gains tax by 2017/18, and growing in subsequent years.
Before Mr Osborne addressed the conference Nick Clegg said that although the Tories could "set out their stall" no agreements on welfare reform had yet been reached:
The speech was well received by the rest of the Cabinet and the Prime Minister, who hailed it as, "a great speech."
– FOREIGN SECRETARY WILLIAM HAGUE
It was a fantastic speech. Very, very clear, as always.
– DEFENCE SECRETARY PHILIP HAMMOND
It was a brilliant speech.
I thought it really set an over-arching vision of the various different measures that we have taken in all different areas, and explained how we are dealing with the short-term challenges, but also, much more importantly, setting out the long-term agenda for the future of Britain.
ITV News Correspondent Daisy McAndrew describes how George Osborne's numbers stack up in his hopes to save on the welfare bill: