Conservative Party Conference 2011: live

By Matthew Holehouse, and Josie Ensor

• George Osborne to announce a £805m council tax freeze
 • Chancellor says solving euro crisis is key to growth
 • Osborne to unveil funding for telecoms and science research
 • Civil servants 'going to strip clubs', Eric Pickles to reveal
 • IDS urges party to back married couple's tax cut

Latest

11.33 Here's Chris Grayling, saying: "There will be no more "Whitehall knows best" approaches to getting the long-term unemployed back to work."
 

11.31 Mark Prisk, business and enterprise minister, says: "If you believe our friends in the media it's all doom and gloom."
 
That would be your friends in the media reporting the words of your boss, Mark.

11.22 Now being played in the conference hall ahead of the chancellor's speech: Bob Dylan's Knockin' on Heaven's Door. Write your own jokes.
 
11.11 The quiet man has found his voice: IDS ends with a passage calling for social redemption reminiscent of a liberal reformer of Victorian England:
 
In essence, what we are engaged in is more than benefit change and more than just welfare reform. It is social reform, leading to social recovery. This day, let that be our promise to our country, a promise forged even in the teeth of an economic gale, and against the siren voices saying it cannot be done, that we will hold true to our purpose and renew our commitment to reform our society, so that we can restore aspiration and hope, to people that have been left behind for too long.

11.10 Labour knew many British people "were on benefits living unproductive lives, but their short term coping strategy was to bring in more and more workers from overseas to fill the gaps."
 
11.06 Onto another IDS passion: gangs, which he researched at his CSJ think tank. You cannot arrest your way out the crisis, he says.
 
Many young gang members drift in from dysfunctional broken backgrounds, in search of a place to belong, a perverse kind of family, others through fear of retribution. With no role models except the violent and the criminal, like child soldiers of the third world these young minds bear the deep scars of a life filled with anger and violence.
 
Decent people cannot live and businesses cannot thrive in gang-blighted areas, he says. Under Labour ghettos developed out of sight, but: "In August the inner city came to call and everyone was horrified by what they say." The riots were a wake up call to social reformers, and showed "containment is not an option."
 
11.04 The government will recognise marriage in the tax system - "That is a promise," IDS says. It will benefit the poorest families most, he says. It will "reverse the biases against stability we’ve seen in recent years, including the damaging financial discouragement to couple formation." Very romantic.
 
11.02 Hug them tight: IDS credits Liberal Democrat minister Steve Webb for the restoring the earnings link and a "triple lock guarantee" on the rising value of the state pension.
 

10.57 He hails the Work Programme: "Not just the big society at work, but the big society getting people back to work. And ending the something for nothing culture."
 
See also: Peter Lilley, social security secretary, Tory conference 1992: ''I'm closing down the something for nothing society."
 
He says:

Work with us to find and stay in employment and you will get all the support we can muster. However, failure to seek work, take work, stay in work, or cooperate, and you will lose your benefits.

10.56 IDS says: Half of children's families breakdown by the time they are sixteen. A fifth of households are workless. Social mobility has ground to a halt. A million children have alcohol or drug dependent parents.
 
Is it any wonder we face such entrenched levels of family breakdown, inactivity and a sense of entitlement? Ending this failure is like turning a super tanker around – but we must and we are.
 
10.54 The riots were evidence of deep social problems. It is right for there to be decisive and swift punishment but it is within a "familiar" context:
 
the steady rise of an underclass in Britain – a group too often characterised by chaos and dysfunctionality and governed by a perverse set of values. Think of murdered Rhys Jones, Gary Newlove and Baby Peter, kidnapped Shannon Matthews, and tortured Fiona Pilkington. And many others – innocent victims of a broken, damaging culture...a culture that generates growing pockets of deprivation.

10.51 IDS gets roars of approval for chanelling Thatcher:

at a time when the British people are tightening their belts, and the European Commission orders us to open our doors to benefit tourists and pay them benefits when they arrive here, I have a simple message for them. No, no, no
 
10.46 Iain Duncan Smith, Work and Pensions Secretary, is on his feet. He says his wife is well enough to come back to conference. She was battling cancer. "Welcome back Betsy, you've been missed," he says.
 
Labour "spawned a culture of conspicuous consumption" where people were only valued by "how much they earned" - that was the cause of the debt crisis, IDS says.
 
10.41 Dan Biddle, who lost both legs in the 7/7 bombings, is telling Maria Miller, disabled person's minister, about how the terrorist attacks changed his life and the barriers to day-to-day living and access to work. How can we spend money on disabled people wisely, she asks.
 

But unlike Grayling, Miller relies on a crib sheet to interview her guest

10.33 Lord David Freud tells Grayling 850,000 households who've never worked - twice as many as 1996 and after the longest boom in British history. The solution is tapering away benefits slowly under the Universal Credit so people find they don't lose money for working. "You don't need a PhD or a supercomputer - you can see if I work a bit more I earn a bit more,"
 
The Universal Credit will launch in October 2013, Fraud says. "It's not a big bang approach. We are graduallly moving people on to the system over the next four years. We are building it strand by strand. We are constantly finding out how it works in practice. Very innovative and much safer [than a full launch]. It's on time and it's on budget."
 
...which is not what Treasury officials told ministers, warning the scheme risks arriving late, billions over budget and possibly failing.

10.28 Sebastian Payne blogs on the latest polling figures and says: the Tories are steady in the polls, but David Cameron's popularity is waning
 
It is David Cameron’s reputation that has taken a beating over the adversities of the past year. In September 2010, a slight majority thought he was doing well as Prime Minister: that has since dropped 10 points to just 43 per cent. This weekend, only 19 percent said he is a ‘good’ Prime Minister and 23 per cent classed him as ‘poor’. Not a comforting start to the conference.
 
10.24 Nick de Bois MP, Enfield North, runs jobs fairs in a local leisure centre. He expected 300 - 400 people - but 1200 turned up, including senior chemists, and they ran out of forms. "You are the first person to take any interest and stop and talk to me," a man told him. "That really is conservative social action in action," Grayling says.
 
10.18 Are the jobs out there, asks Grayling. "Definitely, without doubt. There's plenty of work out there for anyone with any condition," says the advisor on the right.
 
You can now do up to two months work experience while claiming Job Seekers' Allowance, Grayling says.
 
10.09 Grayling wheels on four work programme advisors and participants onto the stage, where they sit around a coffee table. "It's very very challenging. Low self-esteem, low self-confidence, a benefit culture," says one advisor.
 
"There's a view that most people out of work don't want to work - that's never been my view," says Grayling. The Work Programme is a "giant employment dating service," he says.
 
Shane Clark, who Grayling met in Oxford, had a brain tumor and had two operations, but couldn't find work at his skill level or below. "It was desperate for me towards the end," he says. But A4e, the provider, found him a job within the day. Phil Howarth was unemployed for nine months after taking his A-levels, and his provider secured him an interview the first thing the next day.
 

10.05 Chris Grayling, employment minister, is delivering a report to conference on welfare reform including disability benefits, housing and the work programme. He says the housing benefit cap is "on the way".
 
The Work Programme works because they let providers do whatever they think best to get people into work - no more "Whitehall knows best," he says. Making providers "put their own money on the line" to win payment by results is a revolution. There are entire streets and communities without work, he says.
 
09.49 Some more on those Osborne announcements later today.

• There will be £150m to improve mobile coverage by building extra masts, paid for using "underspends from central government departments" - increasing UK coverage from 95 to 99 per cent of the UK and with "improved voice services" by 2013.
 
• In science there will be £50m in a research hub to commercialise the Nobel prize-winning material graphene- a 'carbon honeycomb lattice' developed at Manchester University which is the thinnest, strongest material known to science and conducts electricity better than any other material.
 
• and £145 million to support High Performance Computing and the associated e-infrastructure to make Britain a "world leader in supercomputing" - necessary for development such as drugs and car manufacturing.
 
... but where are these "underspends" coming from? Tax receipts have fallen as growth stagnates - and the FT has forecast a £12bn black hole in public finances - a structural deficit 25 per cent higher than thought.
 
09.38 George Osborne earlier rejected calls by bosses' think tank Institute of Directors for the rate of corporation tax to be cut to 15 per cent - saying he didn't have the money. The rate has already been cut from 28 to 26 per cent and further reductions to 23 per cent by 2015 have been promised.
 
The IoD's new director general, Simon Walker said this was "not enough" and said a 15% rate was one of the key measures which could "make the UK one of the most competitive advanced economies in the world by 2020-25".

He said the Government is "on the right tracks" but "they are not going far enough and they are not going fast enough".
 
He told the Today programme:

I think there is a despair around Britain as a whole, around British business, about the way the economy is trending. We would like to see a new rule about government spending - and we would like the Government to commit to it by 2020 - and that's that total government spending should be no more than 35% of GDP and it has been 50% in recent years. And the other big goal is corporation tax. The Government wants to take it to 25%, we are saying let's get it to 15% by 2020. That would be the second lowest rate in Europe and would a real magnet for international investors.
 
08.58 He's not speaking until tomorrow, but in today's Telegraph, Boris Johnson offers his own plan for growth: ship Edward Miliband off to China to destabilise their economy and boost our own:
 
As one experienced and cynical financier put it to me: "There is a massive transfer of wealth going on, from west to east." There is one obvious solution, and that is to infect these vast new market economies – as fast as possible – with the British disease. We must spread the sclerosis. We must get them addicted to our vices... You will remember how the Germans brilliantly destabilised Russia in 1917, by sending Lenin in a sealed train from Zurich to the Finland Station in St Petersburg. We could send the human panda to Beijing, in the same spirit of discreet sabotage.
 
08.49 Daily Telegraph conference diary... by our team in Manchester

• In Mr Cameron's suite in the Midland Hotel is a vivid reminder of how far he has to go on his crusade against political correctness. The windows are bolted shut, with a small note advising this is "due to health and safety".
 
• Some Cabinet ministers yesterday found themselves heckled by trade union marchers. Not Francis Maude. He cunningly donned Jeremy Clarkson–style jeans and a casual shirt, and was able to pass unremarked on.
 
• Eric Pickles, the Communities Secretary is beloved by Tory members and restaurateurs alike. His consumption is of such interest that the bookmakers take bets on it. We can report that by lunchtime yesterday, Eric had polished off his second curry of conference. What odds on double figures by Wednesday?
 

• Before the conference, Tory spin doctors feared George Osborne's speech today would be overshadowed by the European financial crisis. Yesterday, they found a new threat: the appeal verdict in the "Foxy Knoxy" murder trial in Italy. "I know which one I'd rather look at," says one admiring male staffer.
 
08.44 Benedict Brogan emails in his daily briefing:

Dave’s quite dinner was unluckily interrupted last night: the PM and his inner circle (Kate Fall, George Osborne and Steve Hilton) somehow managed to pick the same restaurant as half the press pack.

Thanks to that, we can report that Dave had duck and a Chinese beer. More controversially, he snuck off at 10pm. George Osborne did as an austere Chancellor must and refused to pay, leaving Steve to pick up the tab.

Read Brogan's Briefing in full and sign up to his daily email here

08.39
 Francis Maude may have dubbed the National Trust's position as "bollocks" but ministers are clearly rattled by the reaction to the planning shake-up. The rules are to be "redrafted for clarity", the Times reveals.
 
According to the paper, Greg Clarke “is in the process of going through the document line by line” with the National Trust, and ministers are now planning to produce a new, slightly longer version of the planning law than the 52 pages already published.
 
08.30 George Osborne is on Radio 4 Today.

One of Mr Osborne’s favourite themes during his round of interviews this morning was what he called the Government “can do” in the face of economic gloom.
 
"If we can help families at a time like this, we will," he says of the council tax cuts. "If you've got money to spare, you should spend it."
 Departments are a "little way short" of their targeted spending, he says. But tax receipts are also lower, so this doesn't wholly explain where the cash is coming from.
 
He will announce further investments in science and giving mobile access to six million more people, plus infrastructure projects such as the Mersey gateway. They are "activist measures," he says. "This government doesn't stand on the sidelines in a global fiscal crisis."
 
Business are in despair, he is told by Sarah Montague. Where's the strategy?

"Our substantial strategy is to deal with the debt. It's very important to keep our interest rate low. Unfortunately not everyone does buy that argument."
 
Alone this is not enough though, and he is cutting corporation tax rates from 28 to 23 per cent. "Of course business wants to go further. I'd like to go further if I had the money, but I don't believe in deficit funded tax cuts," - they have to be "properly funded." He says: "I'd like to permanently lower taxes. I believe lower taxes boost growth."
 
You are not where you said we would be in terms of growth, he is told.

"The world is not where anyone thought it would be. The US economy has ground to a halt. The french econony has ground to a halt. The german economy has ground to a halt," he says, adding a year ago he went on the programme and was urged to persue US-style stimulus.
 

But Sweden has reduced the deficit and cut taxes?

"If you're trying to perusade me of the benefits of a low tax economy don't waste your breath! I'm a low tax conservative," he says. He adds multinationals are returning to Britain because of corporation tax cuts.
 
He adds the biggest single thing that could boost British economy will be a resolution of the Eurozone crisis. He argued they need to increase size of the bail-out fund, and need to fix the weak banks because they are proving a drag on growth. There needs to be a firm decision on Greece and stick to it - but it isn't for him to say what it is. He spent the last three weekends in Europe summits, and will do so again for the next three, followed by a leaders' summit in France. If the crisis is not resolved by then, it is "very worrying".
 
Asked on Sky News about suggestions David Cameron did not support his plans to cut child benefit for higher-rate taxpayers he said that he and the Prime Minister saw “eye to eye” on all key issues.
 
Benedict Brogan tweets:

Osborne has to be 'quite sombre and realistic' in today's speech #cpc11 'Quite a tricky performance for him'

Sky's Sophy Ridge hints there are more goodies to come in the speech:

I'm told will be more significant announcements on growth in George Osborne's speech - on top of science investment & mobile coverage

Louise Armitstead, the Telegraph's chief business correspondent, tweets the financial secretary to the Treasury is not at conference:
 
Hoban meant to be at bfast but had to go to Brussels. View here: at least someone's gone.
 
08.09 Married couples must be given tax breaks to end the “bias” against stable families, Iain Duncan Smith will say today.
 
David Cameron will be reminded by the Coalition’s leading pro-family Cabinet minister that he promised to back marriage and stop couples being penalised.
 
Mr Duncan Smith will say:

I intend for our welfare reforms to make an impact on the couple penalty where it matters most – amongst families on the lowest incomes. Furthermore, the Prime Minister has made it clear that in this Parliament the Government will recognise marriage in the tax system. This isn’t about Government interfering in family life; it’s about Government recognising that stable two parent families are vital for the creation of a strong society. It’s about parents taking responsibility for their children.

At a ConHome fringe event last night, IDS told Fraser Nelson that “if we're going to put money anywhere the low paid are the people who should get support”, raising the prospect that tax thresholds might be lifted further.
 
08.02 Eric Pickles' war on waste continues today: he will reveal how he has discovered officials spending thousands of pounds on taxpayer-funded procurement credit cards at strip clubs and restaurants. He will also promise to end the £250m cost of full-time union officials. He will say:
 
Take the example of Labour blowing £5,000 on my department's officials to have a staff away day at a club. Not a working men's club. Not a Pall Mall Gentlemen's Club. No, a different kind of gentlemen's club – a club which features showgirl sensation Amber Topaz and her exotic chum, Lady Beau Peep. I've never thought of the civil service as lost sheep, I'm not sure why they flocked to that establishment. No more – I've cancelled these plush away days.

He will also cite this Telegraph story on prying councils, saying:

Did you know… if you want to take out a copy of Mills and Boon from your local library… In some places you're asked to fill out a sex survey with intimate details of your private life. No more. I've issued new guidelines so councils don't need to undertake expensive and intrusive questionnaires of local residents.
 
08.00 The Chancellor is speaking later this morning. The council tax freeze will be extended for another year thanks to an £805m 'dividend' from underspends elsewhere - coming to £72 a household, Andrew Porter reports. There is said to be another big bang announcement lined up, though not on the inheritance tax scale.
 
Much of Osborne’s speech is expected to be devoted to a staunch defence of Plan A. He will also comment on the Eurozone debt crisis: Mr Osborne is planning to fly out to Luxembourg at 4am tomorrow to attending a meeting of European finance ministers. “These problems were caused by human beings and they can be solved by human beings” he will say.
 
Coming up today

10.00 - Debate on Welfare Reform and Jobs with Chris Grayling, Maria Miller and Iain Duncan Smith
 
11.20 - Debate on the economy with Mark Prisk and Damian Collins, followed by George Osborne’s speech
 
14.30 - Debate on rebalancing the Economy with Eric Pickles, Philip Hammond, Francis Maude, Grant Shapps and John Hayes
 
15.45 - Debate on the Olympics with Jeremy Hunt, Lord Coe and Hugh Roberts

Pick of the fringe

12.30 - Grant Shapps appears at a Localis debate on planning reform and localism
 
18.00 - Oliver Letwin appears at a Localis event on public service reform

18.15 - Andrew Tyrie and Fraser Nelson debate “Be Bold For Cuts” at a Centre for Policy Studies event
 
08.30 Good morning and welcome to our live coverage of the Conservative Party Conference, continuing today in Manchester.

Contact live blog at matthew.holehouse@telegraph.co.uk