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A Conservative government would freeze council tax for two years, George Osborne pledged today, in a surprise move unveiled to cheers at the party's conference.
The Shadow Chancellor told delegates in Birmingham that it would be paid for by putting a cap on the spending by the Government on consultants and advertising.
Although central government cannot force councils to freeze tax rises, they will offer to help those who limit their spending increases.
The Tories said that Mr Osborne's pledge would save the typical Band D household over £200. It will be paid for by cutting government spending on advertising and consultants by £500m in the first year of government and £1 billion in subsequent years.
He presented the idea as a partnership with local government. If a council can keep a bill rise to 2.5 per cent or below, the Government will provide the money to fund a further 2.5 per cent cut.
Councils that accept the offer will be able to offer constituents a complete freeze or even reduction for two years in a row. Mr Osborne said he expected a 100 per cent take up of the offer. He said the Tories wanted to help families cope with economic crisis.
The unexpected move electrified Tory conference. Mr Osborne said: “The country may not be able to afford upfront tax cuts because borrowing is too high but families facing the squeeze cannot afford tax rises either.
“So we’re going to go into partnership with local councils. If they find matching savings in their town hall, we will give them these savings from Whitehall.”
To cheers, he said: “The next Conservative Government will freeze your council tax for at least two years.
“Every council tax bill of every family in every council that takes part will be frozen.”
In his keynote speech Mr Osbourne also said the City must bear its share of blame for the economic crisis and that a future Tory government would always support and encourage the financial sector.
But he warned that the Tories would not ask hard-working families to subsidise the failures of the City.

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rather than a short term cut, why not simply get rid of all the dross for ever
H.villosa, Bedford,
Another promise from the party in opposition,its amazing how the party in opposition always has the best policies.
Mike J, London,
I'm beginning that those insane enough to consider 'falling back into the arms of Gordon Brown's Labour' this past week can only have done so on the grounds of diminished responsibility.
What possesses them?!
A fourth Labour term is worse than the start of the Cold war. I for one will emigrate
Drew, Nottingham,
I wonder if it's also time to have politicians who've spent time in the "real" world, and actually worked for a living, rather that career politicians who've been groomed since birth to say the "right" thing?
Martyn Taylor, Swindon, England
"Families" ? again. So those without children , the single, the infertile and pensioners, will not qualify for this tax break ? again. why don't all the childless emmigrate and then see how well the countrys' finances would do without us. We pay for everybody's kids. crazy.
frank, swindon, uk
Council tax funds the wages of very many people. Councils outsource work to many private companies. If council tax get cut then all non-job quango people suffer great pain. Gordon brown love these jobs.
lee chok, liverpool, uk
Good, solid speech. Loved the return fire on the "novice" comment. However, I want to see a Tory government put serious caps on MP's expenses, which Labour vigourously opposed. I don't want to be lectured on cutting costs by a bunch of self-serving hypocrites, whatever their party clours.
Ross, Ripon, UK
how about scrapping the HSE that will save a few quid, and it might make us slightly less risk averse.
will, grimsby, uk
Mr Osborne was surely addressing his policy to the English in the UK!? The SNP in Scotland did that in their first year of government! As usual, the Tories are behing the times!
John Edgar, Cupar, Fife, Scotland
After Inheritance Tax we now have frozen council tax for 2 years. At least it;'s a good start. Next cut tax on fuel, cap all energy prices, or force a reduction.
Let the profiteers know that their game is over.
Help small business. Increase retirement pension and cut OAP tax. I
Tom Collins, Stansted Mountfitchet, Essex
It is clear that many of the bands are unfair, so what purpose does the freeze serve? The bands should be reduced.
hamad Lone, London, England
Amazing comments - people seem to believe increasing taxation is a symtom of inflation rather than one of the causes.
It is good to see that, unlike the Labour Party, the Conservatives seem to understand that tax is OUR money spent on trust, NOT a bottomless piggybank to be raided
Peter, London,
Great Idea, we IN England pay far too much tax, time to cut down the size of government to match what we can afford. Why have several layers of local government, why have a borough council, a district council and a county council, all doing different things.
rob, worthing,
The usual big promises by a gov.t before election day comes , will they deliver?, wishful thinking, but i think the labour costs bill could quite easily be reduced by anyone with half a brain, the problem for us now is that this gov.t has saddled this country with so much BAD debt
C. Kroustis, London, UK
So we may anticipate enormous rises in council tax for the next two years in the "usual suspect " areas in order to get as far ahead of the game as possible before reality arrives. It would have been better to have said that any such tactics would be reversed and then the freeze would start.
D.L. Stephens, York, England
Come on you Tories show this bunch of lefties how it should be done as ONLY a Tory can.
Roll on the next election and an end to the fools in government and back to commonsense and normality.
D Case, Newquay,
Labour or Conservative it really doesn't matter.
We need to get rid of career politicians, get more independents into parliament.
If we have to have the current political parties then no more backing from the wealthy or the unions.
As things stand the majority are not properly represented.
J Whiteside , Lytham,Lancashire, England
Freezing council tax is a start we the people are far to over taxed as it is now.
And what pray tell is labour done for us over the past 12 year's 111 sheath tax's at least the troy's are saying we will help with your tax pain ... all you get from brown is i feel your pain
phil, swansea, uk
And what happens after two years?
Answer: It just carries on increasing at above-inflation rates as it has always done.
Sean, Surrey, UK
A good start. Whatever the Left say about 'Tory cuts'. Getting shot of obcene spending on government self promotion and consultants, in order to take the pressure of the tax payer is NOT cutting back on essential public service. How those on the lowest incomes are coping at the moment I don't know
Ben, London, Formerly England
The reason for the council tax annual increases is two fold, to pay for council workers wages (usually 2x what they'd get in the private sector) and secondly their pensions.
You could easly cut headcount by 30% without affecting productivity.
John Banks, Durham, UK
This is irresponsible populism. Taxation should in general be neutral, but owner-occupied housing is treated very favorably when compared with alternative investments. Osbourne is wrong.
In any event I don't think he will be in a position to offer any relief in taxation.
Peter, Paphos, Cyprus
The most ridiculous plan yet. What they should be doing is the complete opposite, advocating taxation across the board. This way the economy can be stabilised long term, the citizens will have security. More creativity was put into taxation than finding loopholes and evading it.
Stephen Pain, Odense, Denmark
SNP policy.
craig, Edinburgh,
well who'd have thunk it? A Tory policy centred around taxes!
kaan, london,
Top notch speech - this is leadership, this is what this country needs - a Conservative government. Lets call an election now and safe Britain from a dithering destructive Labour government. Cannot wait for Cameron's speech lets hope he can raise the Tories game even further. Well done George.
Alexander Grant, Ross on Wye, UK
As a Tory supporter I must say that this is very silly policy at a time of increasing inflation.
CliveR, Wssex, UK
They should go further on Governemnet spending cuts to pay for it. I suggest they "pair up" at least 50% of MPs and make them redundant. The rest of the population is suffering serious redundancy measures and cutbacks. Politicians shouldnt be protected, whatever party.
alan, worcs, uk