3 Oct 2011

‘Back of the sofa’ conference economics

Remember the 2008 Conservative conference? It was a hectic time, the middle of the (first?) banking crisis. George Osborne even rushed to London to talk to Alistair Darling though the talks were pretty perfunctory.

When he got back to the conference he announced this to the hall:  “I can tell you today that 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.”

It was even on page seven of the Conservative manifesto. I quote: “We will keep council tax the same price for two years.”

Year one was this year and year two is next year. The coalition agreement,  it’s true, watered this down a bit. It said: “We will freeze council tax in England for at least one year, and seek to freeze it for a further year…”

So the announcement by George Osborne that he will actually deliver a second year of council tax freezes isn’t exactly a bolt from the blue. Sure, he only announced a one year freeze in his emergency budget in 2010 but he probably only announced one year so he could, with a flourish, announce the second one separately.

On a separate note, is there a case for starting a new “Back of the Sofa Watch?” That’s where one minister’s been joking that the extra money being allocated in the conference season has come from.

Today’s council tax freeze is based on an £800m “underspend” found behind the Whitehall cushions. That’s on top of the £250m announced on the eve of the Tory conference for bin collection.

It sounds like we’re getting £150m for phone masts in areas where it is uneconomic for the phone companies to put them up (say goodbye to the office message that your holiday hideaway is in a bad reception zone, I’m afraid!).

The £500m infrastructure money announced at the Lib Dems (see how the sweeties are allocated!) was similarly rummaged out of the living room furniture.  So that’s £1.7b so far in the conference season.

One other point from yesterday. The Prime Minister, in his interview with Andrew Marr,  said the council house changes and the housebuilding measures could mean “400,000 extra jobs,” which is how many therefore reported it. The advisory note from the Conservative Party talks about it “supporting” 400,000 jobs. I think that’s rather different.

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One reader comment

  1. Philip says:

    That was the point of deep up-front cuts – so the Government would have sweeties to hand out in places where it was politically expedient to find money. That’s why I believe that the current economic policy is primarily political.

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