Osborne Plans Fuel Duty Freeze Until 2015

Fuel duty will be frozen until 2015 if the money is available, George Osborne has pledged as he addressed the Tory party conference.

The Chancellor's pledge came as he warned the battle to rebuild the UK economy is not over and that the Tories must be allowed to finish the task.

Mr Osborne accused Labour of making up policy "on the back of a fag packet" as he addressed the Conservative Party Conference.

He warned of disaster if Ed Miliband was to win power, suggesting his eye-catching energy price freeze plan would stunt growth and cost jobs.

Countering accusations of complacency about the recovery, Mr Osborne insisted there was "no feeling of a task completed or a victory won".

It was "not even close to being over and we are going to finish what he started," he declared, insisting his policies were a "serious plan for a grown-up country".

In his speech, he also unveiled tough new rules to make the long-term unemployed earn their benefits by doing full-time unpaid community work from next year.

From April, people still without work after two years on the coalition's Work Programme will face three options if they want to remain on the dole.

They will have to do community work such as litter picking, visit a job centre every day or take part in compulsory training to tackle problems like illiteracy.

Those who break the rules of the new Help to Work scheme, for example by failing to turn up without a good reason, could lose their benefit for four weeks.

A second offence would see them lose it for three months.

Ahead of his address, Mr Osborne insisted on Sky News that the policy was not a return to the Conservative "nasty party" of old - describing the move as "compassionate".

"This is not about punishment, this is about help," he stressed, but also said: "What we are saying is there is no option of doing nothing any more.

"We are saying we are going to help you into work but we are going to ask for something in return. I think it is a very compassionate approach to people who previous governments just ignored."

Amid concern that job centres will be overstretched, he added that they would have extra money to police the scheme.

The Chancellor's speech came as TNT announced it was creating 1,000 new jobs by expanding its postal delivery service.

Potentially, around 200,000 long-term Jobseeker's Allowance claimants could be eligible for the new coalition initiative.

But ministers believe the numbers on it will be significantly lower, as many of those working covertly will decide it is no longer worth trying to claim benefits and drop out.

The scheme, devised by Work and Pensions Secretary Iain Duncan Smith, will cost around £300m - with the money likely to be found from departmental underspends.

Sky's chief political correspondent Jon Craig described the new conditions as "a tough crackdown".

Labour's shadow chief secretary to the Treasury, Rachel Reeves, said: "It's taken three wasted years of rising long-term unemployment and a failed Work Programme to come up with this new scheme.

"But this policy is not as ambitious as Labour's compulsory jobs guarantee, which would ensure there is a paid job for every young person out of work for over 12 months and every adult unemployed for more than two years."

During his speech later, Mr Osborne is not expected to unveil specific action on living standards, despite pressure to respond to Labour leader Ed Miliband's energy price freeze pledge last week.

Instead, the Chancellor will stress the need to stick with the coalition's economic plans, warning that the UK still has not fully recovered from the credit crunch.

He told Sky: "Our economic plan is helping Britain turn a corner. We have dealt with the problems we inherited, we have still got a long way to go ...

"By contrast the Labour party got us into this mess and all I hear from them is that they want more borrowing and more spending. A set of gimmicky announcements isn't going to cover up the fact that they don't have a credible economic policy."

Critics claimed the Government scheme would treat the unemployed more harshly than criminals and was just a "rehash" of plans that had already failed.

Joanna Long, from the Boycott Workfare campaign, said: "It's bad news for people who will be forced to work at far below the minimum wage - and it's terrible news for the people whose jobs they will be replacing.

"This is about cutting the safety net for unemployed people, and handing something for nothing to charities, companies and councils which should be paying wages and taxes."

Graeme Cooke, from the Institute for Public Policy Research, added that the measures would probably only affect one in 20 people on the dole and warned it needed careful planning.

"The key issue is how such schemes are designed. If they give people real experience of work and the practical employability habits that go with it, they can help people be more attractive to prospective employers," he said.

"But if it is pitched as a punishment where people do menial tasks, it risks acting as a signal to employers that these are people not to employ."

But Matthew Sinclair, chief executive of the TaxPayers' Alliance, welcomed the move, insisting it was unfair to have people on benefits "for years on end".

"There is plenty of international evidence from countries such as Australia, Canada and the US that this type of scheme is not only fairer on those footing the welfare bill, but also gets people back into work," he said.

:: The Chancellor's speech to the Conservative Party Conference in Manchester is being broadcast live on Sky News.