Fuel duty is to be frozen until May 2015, Chancellor of the Exchequer George Osborne announced today.
The pledge - which is conditional on finding savings to pay for the cost of the freeze - came as Mr Osborne unveiled his ambition to ensure that a future Conservative Government will run a surplus in good times as well as bad.
Running a surplus by bearing down on welfare and state spending even after the deficit is eliminated will allow Tories to deliver tax cuts and increased infrastructure investment and ensure that the UK is prepared for any future economic crash, the Chancellor told the Conservative annual conference in Manchester.
Mr Osborne dismissed Ed Miliband’s promise of a freeze on gas and electricity prices after the 2015 general election as a gimmick which would force prices up by deterring companies from investing.
But he said that he was ready to take immediate action to help motorists with the cost of living.
“Provided we can find the savings to pay for it, I want to freeze fuel duty for the rest of this Parliament,” said Mr Osborne to loud applause. “Conservatives don’t just talk about being on the side of hard-working people. We show it day in day out in the policies we deliver.”
Mr Osborne used his keynote speech to confirm plans for a new Help to Work scheme under which the long-term unemployed will be required to do community work, such as picking up litter or cleaning graffiti, in return for their benefits. He said that those who have been unemployed for more than three years would either have to work for their dole, attend job centres daily to search for a job or accept help for underlying problems such as illiteracy or drug dependency.
Defining himself as an “optimist”, the Chancellor told Tory activists that, after a series of positive economic indicators, “the sun has started to rise above the hill and the future looks brighter than it did just a few dark years ago”.
He said: “These were the years when we laid the sound economic foundations on which better living standards are built, the sound foundations without which better living standards cannot be built.
“This is the time for a serious plan for a grown up country. We’re turning Britain around and we say to the people of this nation: we rescued the economy together, we’re going to recover together and together, we’re going to share in the rewards.
“For the sun has started to rise above the hill and the future looks brighter than it did, just a few dark years ago.”
But he added: “The battle to turn Britain around is not even close to being over and we are going to finish what we have started.”
Even after the deficit is brought under control, which under current plans should happen around 2018, Mr Osborne said that a future Conservative government will continue to bear down on spending in order to run a surplus and bring down the overall size of the state debt.
Meanwhile, a Tory government would commit itself after the 2015 general election to increase spending on infrastructure at least in line with growth in national income.
“I can tell you today that when we’ve dealt with Labour’s deficit, we will have a surplus in good times as insurance against difficult times ahead,” said the Chancellor.
“Provided the recovery is sustained, our goal is to achieve that surplus in the next Parliament. That will bear down on our debts and prepare us for the next rainy day.
“That is going to require discipline and spending control. Because if we want to protect those things we care about, like generous pensions and decent healthcare, and buy the best equipment for the brave men and women who fight in our armed forces, all of us are going to have to confront the costs of modern government - and cap working age welfare bills.
“And only if we properly control public expenditure will we be able to keep lowering taxes for hard-working people in a way that lasts. I’ve never been for tax cuts that are borrowed. I want low taxes that are paid for.
“And we are also going to go on investing in the essential infrastructure of our country - the roads and railways and science and communications that are the backbone of the future economy.
“So we should commit, alongside running a surplus and capping welfare, to grow our capital spending at least in line with our national income.”
Mr Osborne added: “These principles will form the foundation of our public finance policy and I will set out the details next year.
“And for those who ask: Is this necessary? I say: What is the alternative? To run a deficit for ever? To leave our children with our debts? To leave Britain perilously exposed to the next time the storm comes?
“This crisis took us to the brink. If we don’t reduce our debts, the next could push us over. Let us learn from the mistakes that got Britain into this mess.
“Let us vow: never again. This time we’re going to run a surplus. This time we’re going to fix the roof when the sun shines.”