George Osborne in crackdown on jobless costs - The Guardian

George Osborne will continue the government's push to reduce welfare spending by announcing a nationwide scheme on Monday to force 200,000 long-term unemployed benefit claimants to either undertake community work, attend a jobcentre every day or go on a full-time intensive programme to tackle the underlying reasons for their failure to find work.

In his set-piece speech to the Conservative party conference in Manchester, the chancellor will also repeatedly warn that the battle to secure Britain's recovery is not yet "even close to being over" – a message designed to remind voters of the risk of returning to Labour.

The £300m jobs programme, appealing to the electorate's demand for stronger welfare measures, will start in April and will be aimed at 200,000 jobseekers allowance claimants.

Polling suggests there is continued public support for ever tougher welfare crackdowns and with the Tories trailing in the polls and in need of a strong response to Ed Miliband's populist conference speech last week, strategists have returned to one of their strongest and most familiar policy areas to push the message that they are on the side of hard-working people.

"For the first time, all long-term unemployed people who are capable of work will be required to do something in return for their benefits to help them find work," Osborne will say, adding: "But no one will get something for nothing. Help to work – and in return work for the dole."

It is significant that Osborne is announcing the plan instead of the work and pensions secretary, Iain Duncan Smith. Reports at the weekend suggested Duncan Smith and Osborne have clashed over the handling of welfare cuts. The chancellor reportedly described Duncan Smith as "thick", an indication of Treasury frustrations at the management of universal credit, the scheme merging a series of tax credits and benefits.

The chancellor has also put himself at odds with the business secretary, Vince Cable, by bringing forward plans for a state-backed £12bn mortgage guarantee scheme which some Liberal Democrats and economists fear will lead to a debt-fuelled boom based on escalating house prices in southern England. The three-year scheme, due to start in January, will now begin within days as banks rushed to back the scheme.

Cable was not told of Osborne's decision, although the Liberal Democrat leader, Nick Clegg, was given an advance briefing.

David Cameron explained the decision on the BBC's Andrew Marr programme. "As prime minister, I'm not going to stand back while people's aspirations to get on the housing ladder, to own their own flat, to own their own home are being trashed. That is why we need to act."

Overall, the Tories were insisting they will not try to neuter Miliband's living standards agenda with specific counter-schemes to combat rising energy prices but will instead focus on the return to growth. Cameron told the BBC: "The only way to sustainably raise living standards is to keep the recovery going, and the economy is now moving."

Osborne will make a similar argument in his speech, saying: "If you don't have a credible economic plan, you simply don't have a living standards plan. For we understand that there can be no recovery for all – if there is no recovery at all."

Critics will claim the scheme, aimed at those on the Work Programme for two years, is likely to put yet more pressure on work providers and jobcentre staff as well as meeting resistance from voluntary bodies reluctant to be involved in workfare that takes jobs from the public sector.

Many private sector firms recoiled from a previous controversial temporary work experience scheme after protests at exploiting cheap labour.

The Tories have piloted a community action programme, a six-month scheme of unpaid community work, and Labour has promised a compulsory work scheme, the jobs guarantee for the long-term unemployed.

The Tories argue that the number of households where no member has ever worked doubled under Labour from 136,000 in June 1997 to 269,000 in June 2010. They claim that in the decade to 2010, 1.4 million people had spent nine out of the previous 10 years on out-of-work benefits.

Under the new plans, unemployed people will be transferred to the new Help to Work scheme at the end of the existing two-year Work Programme if they have not found work.

The 200,000 claimants will then be put on one of three schemes. A third will do community work placements; a third will attend a DWP jobcentre every day to search for work, instead of every fortnight; and a third will be placed on a "mandatory intervention regime" with tough, targeted interventions tackling claimants' underlying problems.

Money will be saved because claimants will lose benefits much more quickly than at present if they are deemed not to be co-operating.

A poll conducted for the thinktank Policy Exchange found by a margin of nearly five to one – 56% to 12% – the public supports the introduction of "workfare" for the long-term unemployed compared with the status quo.

Osborne will try to temper his optimism with a warning that the battle for the recovery is not yet over and no victory is won.

He will also promise in his speech to offer straight answers to those worried about whether the recovery will last and whether they will feel it in their pockets soon.

He will say: "What matters most for living standards are jobs, and low mortgage rates, and lower taxes. But family finances will not be transformed overnight. Because Britain was made much poorer by the crash."

Earlier on Sunday, the prime minister attacked what he called the "nuts" plans to tax businesses announced by Miliband at last week's Labour conference.

"It is nuts, frankly, to put up corporation tax. Jaguar Land Rover is now making world-beating cars, selling them all over the world, and Ed Miliband wants to put up their taxes."

Cameron used more cautious language to criticise Miliband's plan to freeze energy bills for the first 20 months in office if he wins the 2015 general election.

"I want low prices not just for 20 months, I want them for 20 years. So what we need to go is go to the reasons why these prices are going up in the first place – we have got to make these markets more competitive, we have got to make sure that companies behave," the prime minister said.