Page last updated at 15:47 GMT, Monday, 29 September 2008 16:47 UK

Tories pledge council tax freeze

George Osborne announces the council tax plans

A Conservative government would bring in a two-year freeze on English council tax bills, George Osborne has pledged.

The shadow chancellor told the party's conference in Birmingham it would be paid for by cutting spending on government consultants and advertising.

Central government cannot force bills to be frozen - but any council which limits spending rises to 2.5% will get that amount from Whitehall, he said.

Mr Osborne said the move would save the average Band D household 210.

He said he expected all English councils to want to take part and estimated that it would cost 500m in the first year and 1bn in the second.

'Cupboard is bare'

Mr Osborne, who received a standing ovation for his keynote speech, told the party faithful his aspiration was to cut taxes.

But he said that Gordon Brown's "age of irresponsibility" meant that "the cupboard is bare" and the country could not afford upfront tax cuts.

However, Mr Osborne said that his ambition was that a Cameron government would leave office with taxes lower than when it came in.

The credit has dried up, the engines of the economy have stalled, the party is over
George Osborne
Shadow chancellor

And he said that, while he could not cut taxes upfront, he wanted to bring in the freeze because "families facing the squeeze cannot afford tax rises".

The freeze would be paid for by cutting consultancy budgets by 270m in the first year and 770m in the second. Budgets for frontline services such as NHS, schools and police - and the Department for International Development - would not be cut.

The Central Office of Information budget would be cut by 230m in each of the two years.

'Grave problems'

In his speech he also said the City must bear its share of blame for the economic crisis.

He said a future Tory government would always support and encourage the financial sector - but he warned that it would not ask hard-working families to subsidise the failures of financial institutions.

He told Tory representatives in Birmingham: "I am not going to blame everything on the bankers alone. But nor am I going to excuse them of their responsibility, or allow them to think that things can carry on as before.

George Osborne's council tax pledge is a con - it could only be introduced if local councils make big cuts in public services
Yvette Cooper
Chief Secretary to the Treasury

"I am not going to do what the left has done, and use the crisis as an excuse to abandon the free-market economy that has made our country more prosperous.

Mr Osborne accused the government of allowing consumers to rack up more than a trillion pounds of mortgages and credit card bills and households debts "without stopping to think what would happen if the credit dried up".

"We built an economy on the engines of finance and housing and government spending... now the credit has dried up, the engines of the economy have stalled, the party is over."

He said the country needed the "wholly different approach," outlined in a 40-page report entitled Reconstruction: Plan For A Strong Economy.

'False promise'

The document promises immediate help for people struggling with the credit crunch, such as a "fuel stabiliser", so fuel duty is cut when oil prices rise.

But it also sets out long-term reforms, such as giving the Bank of England the power to take over failing banks as an alternative to nationalisation, to "tackle bubbles before they emerge... and make sure that this mess never happens again," Mr Osborne said.

Chief Secretary to the Treasury Yvette Cooper said Mr Osborne "blew it" by not talking about what the Conservatives would do about Bradford & Bingley and global financial turbulence.

"We heard nothing about how they would deal with the greatest financial shock to hit the world for decades."

Conservative or Labour are the same because neither party saw this disaster coming, none of us was really aware of the power of the banks and their global interdependence and interaction.
Carla Thompson, Rugeley

She added: "George Osborne's council tax pledge is a con - it could only be introduced if local councils make big cuts in public services."

Liberal Democrat Treasury spokesman Vince Cable said the Conservatives were simply "passing the buck to local councils".

"This false promise of freezing council tax will be entirely dependent on individual councils being able to cut their budgets, which is likely to leave the poorest areas with continuing council tax rises," he said.

The Conservatives are under pressure to seize back the initiative from Labour on the economy, after Gordon Brown's well-received speech at Labour's conference last week, in which he said it was "no time for a novice" to take over.

Mr Osborne sought to turn that attack back on the prime minister, saying that he should "start listening to the hard working people of this country".

And he added: "Well, Mr Brown, when it comes to leading and listening and understanding: you know I believe in apprenticeships. But this is no time for a novice."

Mr Osborne also hit back at the prime minister's claim the Tories lack economic experience.

"He says he's the candidate of experience. Well I think we've all had enough of the Gordon Brown experience," Mr Osborne told party activists.

Yorkshire Post Tories make surprise pledge on council tax - 52 mins ago
Guardian Unlimited Have the Tories got to grips with the scale of the crisis yet? - 1 hr ago
Yorkshire Evening Post Yorks council tax may be frozen - 2 hrs ago
Daily Record Osborne Lacks Any Substance - 7 hrs ago
Glasgow Evening Times Osborne vows to freeze council tax - 13 hrs ago

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