Throwing money around? Osborne adds council tax to giveaways

By Ian Dunt

George Osborne has added a second annual council tax freeze to the giveaways announced at the Tory party conference, as he seeks to calm fears over inflation.

The move, which will cost £805 million, is estimated to save families £72 a year, but critics asked why the chancellor was spending money so readily while insisting on the need to cut spending elsewhere.

"Half way through the year we can see that, because we've got ahead of the curve on things like trying to eliminate waste and inefficiency, we do have some money to spare," Mr Osborne said.

Councils will not be forced to freeze the tax, but they will receive extra central money if they can limit spending increases to 2.5%.

Labour said the announcement was just a rehash of a 2008 speech given to conference by Mr Osborne.

Since conference season began, the Tories have also announced £250 million for weekly bin collections, increased discounts for those buying council houses and a 'build now, pay later' scheme for developers of Whitehall-owned land.

Mr Osborne also used his conference speech to highlight funding for science investment and computing and increased investment for the mobile phone network together with several transport projects.

"This government is not standing on the sidelines like some other governments are around the world, driven by events. We are getting on top of events, helping Britain through this incredibly difficult economic situation the world faces," he said.

Critics, such as Brendan Barber of the TUC, said the moves were driven by a chorus of criticism at the coalition's lack of plans to stimulate growth in the economy.

"This is not the best way to boost jobs and growth," he said.

"This is politics, not economics."

Mr Osborne refused to commit to any uncosted tax cuts to stimulate the economy this morning, but his answers suggested the government is trying to find any available measure to encourage growth.

"We are a can do government that is intervening where we can," he said.

But with some experts warning that Britain may already be back in recession and others predicting a 'lost decade' of stagflation, there is continued criticism from Mr Osborne's own party about the state of the economy.

"Many people would feel rather more inclined to back the Tories if they felt tackling deficit was part of a bigger plan to boost economy," Lord Ashcroft, former deputy Conservative chairman, commented.

On Saturday, Conservative Treasury committee chair Andrew Tyrie said there was no "coherent and credible plan for the long-term economic growth rate of the UK economy".