Council tax freeze to be extended

A freeze on council tax that was introduced last year will be extended to next year for participating councils.

Chancellor George Osborne told BBC Breakfast this morning that because the Government is ahead of itself due to cutting down on waste and inefficiency, it actually has some of the £350 billion it had pledged to spend spare.

As a result, the Government has decided to use the money - around £805 million - to freeze council tax for councils who agree to limit any spending rises to 2.5 per cent.

Osborne told the BBC that the Government is 'committed to helping with the cost of living'.

The Conservative Party conference is due to get underway in Manchester later, where the Chancellor is under pressure to give detailed plans for UK economic growth.

Meanwhile, business groups have criticised the Government for being 'out of touch with reality'. According to the Federation of Small Businesses (FSB), although the Government has adopted several policies that will help small firms, none of them go far enough.

John Walker, national chairman at the FSB said: "If unemployment was lower and consumer spending higher, Government policies to grow the economy might work. But they are out of touch with reality. With economic growth sluggish at best, spending on the high street low and unemployment high, the Government needs to ratchet up its growth agenda and send a clear signal to the business community that it will support them.

"Small firms lack confidence about their future prospects but they also hold the key to recovery. Kick-starting demand and further incentivising job creation would give small firms a fighting chance to return to growth. But as it stands, Government policies are merely scratching the surface."