Conservative conference 2012: day two as it happened

• George Osborne: Tories are real party of 'one nation'
• Osborne: we have not failed to help 'ignored middle class'
• Housing benefits cuts may force jobless to live with parents
• Boris: London has turned its back on people it needs most
• Watch conference speeches live
• Email me on ben.bryant@telegraph.co.uk or tweet me

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18.05 That's all from day two of the Conservative Party Conference. We'll be back tomorrow with more rolling coverage, background and insight from our team of reporters and commentators. Tomorrow's agenda looks like this:

09.00 Environment, Energy and Climate Change session with Secretary of State for Environment, Food and Rural Affairs, Owen Paterson
09.45 International Development with Secretary of State for International Development, Justine Greening
11.00 Mayor of London
11.30 Health and Education with Jeremy Hunt and Michael Gove
14.30 Home Affairs and Justice with Theresa May and Chris Grayling
16.30 The Road to 2015: A Conservative Majority, with CCHQ’s Director of Campaigning and member of the Campaigning Team, Stephen Gilbert

17.47 Our Head of Business Damian Reece has written in favour of comments made by Waitross managing director Mark Price, who told the Conservative Party Conference that attacks on business had to stop to loud applause:

W

hile one coalition has been trying to deliver change politically, it has ignored another - the coalition between politics and business.

When these are working hand in hand then everyone can benefit and the country can progress, however steep the challenges we face.

17.35 Boris Johnson is doing an astonishing job at transmitting a kind of rock star status at conference this year. Now his fans are turning up hours early, writes Michael Deacon:

There are currently two men stationed outside Hall 1 whose job is to inform the clamouring hordes, "This is NOT Boris Johnson! This is Oliver Letwin! You are TOO EARLY!"

17.27 A nice detail from Lucy Manning:

17.15 Political Correspondent Rowena Mason has more on Ken Clarke's biting criticism of Boris Johnson earlier:

"

Everyone's wondering whether the Tory leadership sent out Ken Clarke to undermine Boris at lunchtime today. Clarke is the perfect choice for such a job - a wise old political veteran able to criticise the Mayor with a half-serious smile on his face. He's seen numerous leadership challenges in his time and doesn't think Boris has it in him. He also reckons the Mayor will be soon be "out of fashion" at this rate and ought to put a stop to early speculation if he has serious ambitions to take over in future. It's quite a clever pitch but even Mr Clarke himself acknowledged that Boris might feel "patronised" by such advice."

17.10 Senior Political Correspondent Christopher Hope has this interesting nugget on the fractured Coalition:

"

Don't believe the hype about the Coalition breaking up six months early (as espoused by leading Liberal Democrats like Vince Cable). New Local Government minister Nick Boles says that the Tories and Liberal Democrats will want to stay together right up until May 2015 to allow for the most possible time for the economy to heal. Boles says that it is “highly implausible” that the Coalition will break up early: "We will need every single one of those weeks and days to maximise and…. [ensure] there is a bit more progress on the economic front”.

17.00 Boris Johnson might be receiving a rapturous reception outside conference, but not inside not everyone is pleased to see him. Ken Clarke said that Bojo 'is not serious enough' to be prime minister, reports Rowena Mason:

Boris Johnson is not serious enough and needs to get his "nose to the grindstone" if he really wants to be prime minister, Ken Clarke said today.

In a series of cutting remarks, Ken Clarke, the Cabinet minister, suggested Boris Johnson might only want to lead the country because he likes publicity and said the London Mayor will probably be "out of fashion" soon."

16.54 Senior Political Correspondent Christopher Hope has delivered his verdict on Osborne's speech - which was, he says, "not even as good as the Labour leader's showing in Manchester":

"The Chancellor gripped the lectern firmly, his eyes flicking between the auto-prompter glass screens in front of him. Even when he lifted his gaze, statesmanlike, to the metaphorical sunny uplands, he was able to see his words on a large LCD TV screen at the back of the hall.

"This wasn't Martin Luther King-style oratory. It was not even as good as the Labour leader's showing in Manchester."

16.45 Unfortunately technical issues mean that we will not be bringing you coverage of the panel debates, but we will continue to give you insight from our team inside the conference as well as reaction to today's speeches.

16.37 Boris certainly knows how to make an entrance. More from Deputy Political Editor James Kirkup:

Blond chaos is here. Boris is in the conference complex, surrounded by a huge scrum of cameramen and hacks. Such was the turmoil as Mr Johnson arrived at the Hyatt that one cameraman was thrown off his feet and left needing medical treatment."

16.30 Just before we kick off the last session of the day, James Kirkup has more on the extremely well-received arrival of Boris Johnson:

The Blond Eagle has Landed. Boris has been spotted getting off a train at New St station. Reports suggest that crowds of travellers greeted him with cheers of "Boris, Boris, Boris". Are David Cameron's nightmares about to come true as his old school non-friend overshadows his conference?"

16.28 From a fringe meeting at conference, our senior political correspondent Chris Hope writes:

Home Office minister Damian Green shows how to win gracefully when he tells an audience of 50 at a fringe meeting organised by the Institute for Government that any further electoral reform wont happen for three decades.

He says: “Things are much less tense than they were – particularly after the AV referendum, when we were running a strong and effective campaign against a policy that was absolutely at the heart of the Liberal Democrats’ agenda and we have smashed it out of the park for the next 30 years at least.

“I am not surprised that they felt quite sore about that – but that is democracy. Don’t ask the public to answers questions when don’t know what answers they are going to give.”

16.24 In just a few minutes' time we have the Conservative Policy Forum - two panel debates on Cutting the Deficit and Challenging the Something for Nothing Culture chaired by Oliver Letwin.

16.19 It's Boris mania in Birmingham, tweets Michael Savage:

15.30 A healthy round of applause for Pickles. Iain Duncan Smith up shortly.

15.28 Pickles reveals that he has a portrait of Che Guevara to remind him that "Without constant vigilance, the cigar chomping commies will take over again."

15.27 Pickles is introducing new powers for councils to "stop caravans in their tracks". He promises "unlimited fines for those who ignore planning rules and defy the law."

15.25 Now the Green Belt, whose future has been subject to speculation. Pickles says unequivocally: "The Green Belt plays a vital role in stopping urban sprawl. And we will protect it."

15.22 Pickles's damning assessment of the riots: "A Gucci generation looting flatscreen tvs and trendy trainers."

15.20 A contender for pop culture reference of the conference from Pickles:

I've been transformed from a Yorkshire tyke to an Essex

TOWIE

. My constituency is the location of the TV programme The Only Way Is Essex. It's fun tv and we all enjoy it. But there's another Essex value and that runs deep in our party. If you work hard, you can go far.

"It doesn't matter where you come from. It's where you're going that counts."

15.18 A surprisingly small ripple of applause for Pickles's praise of Mo Farah: "It was a great thing that kids in Birmingham were waving the flag [...] for British champions like Mo Farah. Born overseas, but proud to be British."

15.14 Pickles turns to the armed forces:

We've changed the rules to give armed forces first priority [over immigrants] on our home ownership schemes.

"Some labour councils are actually turning their backs on our armed forces. Why? because there could be some 'equality issues'.

"There might be. I don't mind. I don't mind discriminating in favour of our military heroes."

15.12 Pickles praises the Right to Buy scheme:

It was the conservative party that helped me get where I am today. And now I want others to have a chance in life. There is nothing more fundamental than supporting home ownership.

"We have reinvigorated the Right to Buy.

"The right to buy gives something back to families who work hard, pay their rent and play by the rules.

"Sadly, many Labour councils are keeping their tenants in the dark about these new, extended rights.

"Their council leaders fight tooth and nail against a right to buy."

15.09 Pickles opens with a gentle ribbing of the Lib Dems: "It still seems strange to be working alongside our yellow chums in government.

"In private, [Vince Cable]'s not as cheerful as he seems on the telly," he says, to a ripple of laughter.

15.08 Eric Pickles up next.

15.04 John Prescott has surfaced on Twitter to take aim at George Osborne:

15.02 Councillor David Pugh up now with an account of how the Strengthening Families Initiative has improved the Isle of Wight, where he has been "tackling the culture of worklessness that exists within a small minority of our population."

"Too many of our young people and families are demotivated and lacking the skills and the ambition to succeed.

"We can't be a centre for enterprise if we don't supply educated and ambitious workers."

14.56 That's the end of Maude's speech. Meanwhile, the cracks in the coalition are being laid bare as one senior Lib Dem reacts to Eric Pickles's proposal - by saying it "sucks":

Coalition tensions have been exposed as a senior Liberal Democrat branded plans for a council tax freeze "nonsensical" and warned that they would force deeper cuts to vital local services.

Gerald Vernon-Jackson, leader of the Liberal Democrats at the Local Government Association, said the proposal being formally unveiled by Communities Secretary Eric Pickles "sucks".

In a strongly worded attack, the leader of Portsmouth City Council accused the Government of "headline grabbing, short-term, nonsensical financing" and abandoning its commitment to localism."

14.54 Maude concedes that the government aren't "very popular":

This government has made a good start but it is only a start. We may not be very popular at the moment, but let me tell you this. in the 1980s i was privileged to be a minister in Margaret Thatcher's government.

W

e weren't popular then but were doing steadily, tenaciously, what was right for the country."

14.50 Now Maude on reforming the civil service, arguing that the will for reform is coming from within:

The best civil servants understand the need to reform the civil service itself. It'll be smaller, flatter, digital, more unified, with decisions taken by ministers.

"Civil servants themselves support change. They tell us they're frustrated.

"We want to unleash the best of public servants to run their own show."

14.49 Maude cracking down on union costs to the taxpayer:

No full time trade union reps at the taxpayer's consent.

"A thousand trade union reps a week paid for by the taxpayer at the union's seaside conference? Forget it."

14.47 Maude on efficiency:

Every hard earned pound of taxpayers money that we save through efficiency is a pound that can be spent on frontline services on which vulnerable people defend.

"Look at British Airways. Everything that isn't about flying an aeroplane is done online. Government should be the same - we aim to be digital."

14.45 Maude asserts that the government have saved £500 for every working household across the country.

We did it by doing what every "prudent" household would do, he says. Consulting billls, temporary staff and ICT projects were all part of the cuts.

[Labour] splurged fortunes on consultants, vanity advertising campaigns and websites. Headcount boomed"

14.43 Now Maude turns to the civil servants who are making "unprecedented" savings. He says:

Inheriting the biggest budget deficit int he developed world, we have to make every pound count.

I set up the efficiency and reform group [...] to be the taxpayer's champion."

14.42 Maude praises volunteers:

The weekend after the Olympics no fewer than 6000 local sports clubs organised events to get people involved.

"Turn up, take part, join in - that was the call. and hundreds of thousands did that.

"A huge credit for all of this [...] is due to my colleague Nick Hurd, the minister for civil society."

14.39 That segues neatly into Francis Maude who introduces the session:

This session's about turning communities around

"A bigger stronger society - that's when more people do more things together - with each other, for each other."

14.38 The Birmingham-based charity partnered with the Conservatives to give a free breakfast to underprivileged children. It's being touted by Staffordshire Moorlands MP Karen Bradley as an example of people coming together to improve their community.

14.32 We're back from lunch. There's going to be a short video about a charity called 'Magic Breakfast' before the next session: Turning Communities Around with Iain Duncan Smith, Eric Pickles and Francis Maude.

14.25 Here's Michael Gove looking appropriately studious as he turns his gaze to one of the video screens:

14.20 Thomas Pascoe has blogged his reaction to George Osborne's speech just before the delegates file back into conference. He takes a dim view of Osborne's "weak" speech which made him look like a "blind axeman, swinging a blunt hatchet with gay abandon in the vague direction of his target":

The difficulty lies in Mr Osborne's conclusion. Instead of putting forward ideas which would benefit working parents at the same time as wielding the axe, Mr Osborne's solution is simply to make it more difficult for everyone to have children."

14.15 What is a One Nation politician? Ken Clarke thinks he knows - he gave a convincing explanation on Question Time last Thursday, describing them as politicians who "reintroduced free market economics into the country and tried to modernise the state." He also said that neither Ed Miliband nor Margaret Thatcher were One Nation politicians. But what about Nick Clegg? Our Political Correspondent tweets:

14.09 More reaction in, this time from green campaigners Friends of the Earth who are frustrated by Osborne's fixation with fracking and failure to provide a boost to the green economy:

Generous shale gas tax breaks show the Chancellor clearly isn’t listening to the increasingly vociferous warnings from leading politicians, businesses and climate experts about his reckless dash for gas.

“The green economy is one of the fastest and only growing parts of the overall economy – and with Government support it could create thousands of jobs and business opportunities.

“But with a fossil-fuelled economic strategy firmly rooted in the 1970s, George Osborne is looking increasingly incapable of dealing with the challenges and opportunities of the 21st century.”

14.04 The Lib Dems seem to be a bit miffed about their failure to get the mansion tax off the ground. This from Press Association:

Liberal Democrat Treasury spokesman Stephen Williams said welfare reform was the wrong target for deficit-reduction measures and questioned what alternatives there were to a mansion tax.

"I am not opposed to welfare reform, as long as that is genuinely what it is," he told BBC Radio 4's The World At One.

"But I would not be in favour of welfare reform if your starting point is 'How can we bridge the yawning gap in our public finances?'.

"There, I would look for other expenditure savings or fairer taxes from the rich.

"If you are going to rule out that contribution (mansion tax) from the very richest in society, it is hard to see what other effective wealth taxes, and taxes on the highest paid, you have got to come forward with."

14.00 Our Scottish Political Editor Simon Johnson has published a story on Ruth Davidson's speech to conference earlier: Scots are 'paying with their lives' for 'free' benefits, says Scottish Tory leader

13.56 Here's a video excerpt from the first part of Osborne's speech in case you missed it earlier:

13.52 Oliver Wright, Whitehall Editor of the Independent, has this interesting nugget from the former Archbishop of Canterbury Lord Carey at the Campaign for Marriage rally at conference:

13.47 More reaction to Osborne's speech is steadily flowing in. Child Poverty Action Group has this to say about George Osborne and Iain Duncan Smith’s proposal that unemployed families should have their benefits capped if they have more children:

With this abhorrent proposal, the Chancellor is saying that some children will be marked out from birth as second class citizens with their lives worth less than others.

“The Chancellor is utterly wrong to claim that families out of work are better off having more children. If a family without work has another child, the shortfall relative to a family’s minimum need increases and parents must make even more sacrifices to meet their children’s needs. But working families do better because on top of wages they can get in-work benefits like tax credits and housing benefit."

13.43 Rosa Prince, our Online Political Editor, has filed the headline story from Osborne's speech - the invitiation to employees to give up their workplace rights in exchange for owning tax-free shares in their companies:

George Osborne has invited employees to give up their workplace rights in exchange for owning tax-free shares in their companies.

In a speech which was greeted with luke-warm applause at the Conservative Party Conference in Birmingham, the Chancellor jokingly borrowed the Marxist slogan "workers of the world unite" to launch his new scheme.

The plan effectively involves workers gambling on their career prospects, by sacrificing their protection against unfair dismissal and other rights in return for profits on company shares which will be free from capital gains tax."

13.37 We've put together a gallery of some of the best pictures from the conference, which includes this fine shot of David Cameron mid-guffaw:

13.33 Meanwhile, over on Twitter, an amusing spat between two high-profile conservative bloggers - it's Tim Montgomerie of ConservativeHome and our own James Delingpole:

12.54 The Press Association is running a story called "Osborne speech a hit with Cabinet". Perhaps it is more worrying that it might not have been. Defence Secretary Philip Hammond is particularly effusive:

It was a brilliant speech. I thought it really set an over-arching vision of the various different measures that we have taken in all different areas, and explained how we are dealing with the short-term challenges, but also, much more importantly, setting out the long-term agenda for the future of Britain.

12.51 Even the first pictures filtering in from his speech suggest Osborne remains determined to grasp the crisis.

12.42 George Osborne may have ridiculed the gaps in Ed Miliband's speech, but quite a few commentators have already taken to Twitter to ask why he didn't outline more about his plan for growth.

12.40 Our Deputy Political Editor, James Kirkup, has just posted this blog on why Boris Johnson is being greeted at the Tory Party conference with "the sort of expectation and speculation more often associated with the more skittish sort of millennialists".

Publicly, all sides are dismissing speculation about Boris and the leadership as so much hysterical froth, the inevitable result of confining journalists and politicians in a small space with easy access to alcohol. We should all grow up, calm down, shut up and move on. There is no real debate about the leadership, Boris has no such ambitions and David Cameron is intensely relaxed about his colleague’s popularity and profile. Piffle.

12.37 Benedict Brogan says Osborne's speech was "suitably sombre", summed up as: "We fight on, we fight on to win...Welfare and red tape cut to help UK swim, not sink".

12.34 Matthew d'Ancona gives an excitable instant reaction.

12.33 Our mischevious Whitehall Editor, Christopher Hope, provides proof that Osborne was not speaking without notes, unlike Ed Miliband last week.

12.30 He concludes:

I ask for your support and your trust and your resolve as we go through these challenges together. We knew two years ago that the task we were taking on was a great one. it isn't too much to say that the future prosperity of our country - the future of a free enterprise system under law, even the future stability of Europe - is in question in a way it has not been in my lifetime.

We live in a country of courage and creativity, a country that can do incredible things and succeed when we pull together. We never forget that to be the government of such a country is an honour. When we make such decisions, we do not make them alone because we have the British people at our side and together we can deliver.

12.27 On to energy now.

We are today consulting on a generous new tax regime for shale gas so that Britain is not left behind as gas prices tumble on the other side of the Atlantic.

12.25 Says there will be no capital gains tax on new proposals to give employees shares in small and medium-size businesses.

Get shares and become ownerws of the company you work for. Workers, owners and the taxman, all in it together. Workers of the world unite.

12.22 Louise Mensch now has the freedom to stray somewhat off message...

12.19 He has confirmed he is looking for another £10 billion of welfare savings.

We have to find greater savings in the welfare bill. £10 billion of welfare savings by the first full year of the next Parliament. Iain Duncan Smith and I are committed to finding these savings while delivering the most radical reform of our welfare system for a generation.

How can we justify giving flats to young people who have never worked when working people twice their age are still living with their parents because they can't afford their first home?

12.17 "Conservatives are the party of low taxes for the many not the party of no taxes for the few. If there are other ways to increase revenue from the very top without damaging the enterprise economy, we will look for them."

12.16 Says the "party of home ownership" will have "no truck" with the mansion tax.

Our published plans already require us to find £16 billion of further savings. As I've said the broadest shoulders will continue to bear the greatest burden...[But] we won't have some kind of temporary wealth tax - even Denis Healey thought that was a bad idea...Nor am I going to introduce a new tax on people's homes. It would be sold as a mansion tax but once the tax inspector has his foot in the door, you'd soon find most of the homes in the country labelled a mansion.

12.14 He is now addressing critics who have argued he should be cutting even faster: "I'm the chancellor who is cutting the size of government faster than anyone in modern times."

12.12 Points out Ed Miliband didn't mention the deficit in his conference speech last week, adding: "Labour must never be trusted to run the country's public finances again".

No mention of perhaps the most acute problem facing the country...He spoke for over an hour about the problems of Britain and forgot to mention we'd had a Labour government running the country for over a decade. He told us about his life story but forgot to mention he spent a third of his life working for Gordon Brown.

12.09 Admits things are worse than expected at this stage in the Parliament.

The truth is that the damage done by the debts and the banking crisis was worse than we feared...This makes the job more difficult but it doesn't make it any less urgent. Yes, we've cut the budget deficit by a quarter but it tells you something about how big it was that the budget deficit is still higher than it was when a British government went begging to the IMF in the 1970s.

On Wednesday, when he visits the IMF, he adds: "I go representing a country that is seen as part of the solution not part of the problem."

12.08 Jokes about David Cameron's appearance on Letterman, saying the PM might call a fact a "magna facta".

12.07 The barbs continue.

When you're tackling all of these big issues, of course the mid-term politics are difficult. But I tell you this I'd rather have these difficulties because we're tackling big challenges than wake up like Tony Blair did, after a decade in power, and discover he hadn't achieved anything at all.

12.05 Says he can imagine Benjamin Disraeli's disappointment when he discovered he'd "come back as Ed Miliband".

It is risible to believe you can become the party of one nation simply by repeating the words one nation over and over again...The Labour leader wants to pretend he's moving to the centre when all can see he's moving to the left. As it is revealed as an empty gesture, people will be more let down by the reality than they were attracted by the pretence.

12.03 He says the party is on the side of hard-working teachers and corner shop owners as well as entrepreneurs.

We modern Conservatives represent all those who aspire, all who work, save and hope, all who feel a responsibility to put in and not just take out.

They are all part of one nation, one nation working together to get on.

12.01 More on that striving theme.

Where is the fairness, we ask, for the shift worker leaving home in the dark hours of the early morning who looks up at the closed blinds of their next door neighbour sleeping off a life on benefits?...We speak for all those who want to work hard and get on. This is the mission of the modern Conservative Party.

12.00 Says dropped 50p income tax rate because did not contribute to coffers - says "it is a completely phoney conception of fairness" to stick with a tax rate "just to say you've kicked the rich". "Those with the most should contribute the most."

11.58 George Osborne has snatched that one nation mantle right back.

Our country would have been all but ungovernable if we had not been straight with the public before asking them to cast their vote.

We need an effort from each and every one - one nation working hard together, we are still all in this together.

11.57 "Let the message from this conference be clear - we will finish the job that we have started."

11.56 He is comparing Ted Heath's u-turns with Margaret Thatcher who "did not give up but pressed on and overcame".

In 1972, when a conservative Prime Minister two years into office was faced with economic problems and overpowerful unions, we buckled and we gave up. The result was higher inflation, more strikes and a three day week.

Today in the face of the great economic challenges of our age we here resolve, we will press on, we shall overcome.

11.53 Osborne is on stage now, thanking Paul Deighton for delivering the Games and "making Britain proud".

11.49 Michael Fallon has been interviewing chief executives while we wait for George Osborne's speech, due very shortly.

11.47 David Cameron is gaining more Twitter followers a day than Barack Obama, according to Sun Political Editor Tom Newton Dunn. Ladbrokes have reduced the odds on him getting 1 million followers by the end of the year from 66/1 to 2/1.

11.36 Let's hope it's not a tax bombshell...

11.31 The Sunday Telegraph's deputy business editor, James Quinn, reports on one particularly crowd-pleasing initiative:

Transport Secretary Patrick McLoughlin's biggest clap came when he announced overseas trucks will have to pay UK roads.

11.28 Tory MP Amber Rudd just got hearty cheers from the hall by introducing Michael Fallon as "the real business secretary". Let's hope Vince didn't have his TV on.

11.26 Some colourful protesters for the British countryside are tackling delegates as they make their way to hear George Osborne's speech.

11.24 He is tackling the delicate issue of future airport capacity in the South East. Don't mention Heathrow...

The runways are filling up and jets are circling in our skies. It is hitting our prosperity, it is bad for the environment..Of course there are all sorts of ideas. No-one is short of them. The ideas are varied. Boris wants an island. I want an answer...Everyone I seem to meet has their own individual plans and ideas so Sir Howard Davies is going to chair a commission to look at all the options fairly.

11.20 He pledges to reduce by 2 per cent the planned increase in railway "key fares" such as off-peak tickets for 2014 as well as 2013, meaning "money back in people's pockets".

11.19 He says the country cannot afford not to invest in High Speed 2 and pledges to publish plans soon to take the line north of Birmingham. He wants to reduce the journey time from Scotland to London to under three hours. "Our competitors around the world are investing in the best transport, and we must too."

11.15 It's not the catchiest soundbite I've heard, but McLoughlin is giving it a go, saying "I speak plainly but I think big".

I'm ambitious about transport because I'm ambitious for Britain. Transport is the artery of any economy. When transport slows, everything slows. When transport stops, everything stops. So how do we fix it? My answer in three words: invest in infrastructure.

11.12 Patrick McLoughlin has vowed to "put things right" on the West Coast main line. He says the government's role has not changed since he addressed conference as a miner in the 1980s:

Our job in government today is exactly the same as it was all those years ago: to deal with our debts, to go for growth and to get this country moving again.

11.08 Transport Secretary Patrick McLoughlin is on stage now.

11.04 Delegates are being encouraged to take a 15 minute lesson in resuscitation and are promised a "heart-shaped social action badge" in return. They know how to inspire hard work.

11.01 David Cameron's fifth tweet and his first hashtag. Quick learner.

10.58 Peter Kellner, president of polling company YouGov, has provided more dispiriting reading for David Cameron this morning. He says the Conservative Party is now "holed dangerously near the water line", polling at about 31-32 per cent, around the level of their defeats in 1997 and 2001.

Labour looks unlikely to slip below 35% at the next election. If so, then the Tories will need at least 42% to win a clear majority. This requires a five-point increase on last time: a surge that no governing party has achieved since Lord Palmerston led the Liberals to victory in 1857.

Records, of course, are made to be broken. Were Cameron to break this one, his achievement would be historic. Actually, I'm not sure ‘historic’ is quite enough. Given the fragility of Britain’s economy, the prospect of further cuts to our public services, and the UK Independence Party wooing Tory voters on the euro-phobic Right, ‘miraculous’ might be more appropriate.

10.49 Oh dear. Andrew Mitchell might be staying away from conference, but these members of Warwickshire and West Midlands police federations are here, making their, er, subtle references to the incident.

10.40 Asked whether benefits are focussed too much on those who should be at work, Grant Shapps tells 5 live:

I believe the welfare system must support the most vulnerable peple in our society. With the Universal Credit, which is the biggest change to welfare since it came into existence, I want to see people taken out of the benefit trap. I meet people who say "I go to work, Grant, and I am £70 a week worse off than if I didn't." That's wrong, that's immoral, we've got to take people out of the benefits trap and I essentially agree with you - the welfare system must support the most vulnerable who need it and not end up being the system that prevents people from being able to get out and work.

10.34 Grant Shapps is being questioned on 5 live. One of the callers on the phone-in starts with his name, before adding: "That's my real name, by the way." This Michael Green lark is catching on.

10.30 That is it for the UK in Action session. Now we'll have to contain our excitement until 11, when Transport Secretary Patrick McLoughlin takes the stage.

10.28 After being savaged on the front cover of the Independent, Mr Cameron has to reach inside the Guardian to see its barb. Its G2 supplement turns his attack on Tony Blair against him in a blistering piece asking "where did it all go wrong?"

10.18 David Jones has asked delegates to spare thoughts for April Jones and her family.

10.17 Congratulations to David Jones, Secretary of State for Wales, who has managed to get the Jubilee and the Olympics into the same sentence. He says the two events showed how proud Welsh people were of their "dual nationalities".

10.14 The Chancellor has rejected claims the government is failing to help the "ignored middle class", our Online Political Editor Rosa Prince reports.

Speaking ahead of his speech to Conservative Party conference, in which he is due to say that the welfare bill will be slashed by £10 billion, the Chancellor said that the deficit could not be paid off solely from the "wallets of the rich".

He confirmed that the wealthy would have to pay more, but other than ruling out a so-called "mansion tax" on large properties refused to set out the form this would take ahead of the Autumn Statement, due in December.

The Government is planning a new drive to bring down the welfare budget, targeting young people who have never worked, who may be denied housing benefit in future, and parents who continue to have children despite being unable to pay for them without state help.

10.05 Jeremy Hunt is acting as linesman as lobby journalists take on MPs at football. Insert BSkyB jokes here. (Picture via @timgattitv)

10.00 A clue as to how Patrick McLoughlin, the Transport Secretary, will tackle the West Coast issue in his speech in an hour?

09.50 The panel is taking a question from Alistair Campbell. No, not that one. This representative from Paisley and Renfrewshire has been polishing his quip: "I'm the Alistair Campbell that doesn't get paid to speak".

09.46 Even when it comes to a speech about Northern Ireland, Labour is getting a ticking-off for spending too much in office:

Like the rest of the UK, Northern Ireland is suffering from a toxic legacy of debt left behind by the last Labour government...It is a startling fact that Northern Ireland's economy was even more dependent on public spending than when Labour left office when the Belfast Agreement was signed in 1998.

09.43 Theresa Villiers said politics in Northern Ireland are "moving forward". She said:

The two decades since John Major started the peace process have seen Northern Ireland transformed by the Belfast Agreement...A whole generation has now grown up without their lives being blighted by the tragedy of Northern Ireland's past.

But, she adds, "too much public housing remains segregated and the costs of division remain too high."

09.36 David Jones, Secretary of State for Wales, is criticising the Welsh Assembly.

They have a top-down model whereby they decide which voluntary organisations are worthy of support and they disperse money to it...These voluntary organisations become clients of the Welsh government, which I think quite unhealthy.

09.29 The Daily Mail serialises Janan Ganesh's biography of George Osborne this morning, ahead of his speech. It starts with this anecdote about his radical schooldays listening to...Radio 4:

While the rest of his friends mucked about on the number 9 bus on the journey home from school, the 16-year-old George Osborne clamped his pocket radio hard to his ear. It wasn’t the football results he was after — he was resolutely non-sporty — nor the latest single by Madonna, of whom he was a fervent fan.

No, what the ferociously ambitious schoolboy was desperate to listen to was the Budget Speech, live. It was 1988, and the then Chancellor, Nigel Lawson, was delivering radical tax cuts for high earners. As the bus crossed Hammersmith Bridge towards Osborne’s Notting Hill home, he heard the Deputy Speaker halt the session as opposition MPs barracked the Chancellor for scything the top rate of income tax.

09.16 Ruth Davidson finishes her speech with a call to arms:

It is a privilege to be part of our United Kingdom. I will fight for Scotland's continued membership and I would like all of you to fight for it too.

09.15 Ten minutes in and the O word is mentioned for the first time.

The Olympics and Paralympics gave us the best illustration imaginable of how much we all benefit from working together.

09.14 She adds that victory in the referendum must be "emphatic". "It cannot be by an inch, it must be by a mile."

09.12 Ruth Davidson says Scotland has "never had more touchpoints with the rest of the United Kingdom" with 800,000 Scots living and working south of the border. She says the independence referendum is "the biggest debate in a generation", adding that for all the SNP claims much will be the same, there will be fundamental changes:

The SNP say they'll keep the pound and monetary policy will still be set by the Bank of England...We'll still enjoy the BBC. We'll still have the same welfare benefits as the rest of the UK...For all Alex Salmond's bombast and bluster, this is not a done deal.

09.07 Early risers are beginning to gather in the hall for the first of today's sessions: The UK in Action. The Union with Scotland is being described as "the most successful currency union in history" by Nadhim Zahawi, MP for Stratford-upon-Avon. Ruth Davidson, leader of the Scottish Conservatives, will speak, as well as Andrew RT Davies, leader of the Welsh Conservatives, and Theresa Villiers, Secretary of State for Northern Ireland.

09.04 George Osborne poses for a picture with a delegate as he arrives in the conference centre ahead of his speech, expected about 11.50. He must just be happy to see the first person who hasn't mentioned Boris this morning.

08.56 Our intrepid sketch writer Michael Deacon has been testing out the official souvenir stall.

08.51 At least Mr Osborne can hope for support from David Cameron's new official Twitter feed, @David_Cameron. But The Sun says today that the PM could be "too posh to tweet", getting his aides to tap in the messages for him. "I will not be tweeting, I will be telling," it quotes Mr Cameron as saying. Meanwhile, Mr Osborne said he was in no rush to join him on the social network. Perhaps sensible given the stream of criticism the PM has faced so far.

08.42 Poor George Osborne isn't going down very well with the pundits on Twitter this morning, whether it is The Economist's Dan Knowles or Sun political editor Tom Newton Dunn. He will have to hope his speech fares better.

08.28 Here are fuller quotes on more taxes on the wealthy on the way:

The rich are paying more and they will have to pay more. There will be new taxes on rich people in the years ahead. I am not going to have taxes that destroy enterprise, I'm not going to have a wealth tax that even Denis Healey didn't think was a good idea.

We will ask for the rich to pay a greater share but it is a delusion to think that in this country, the only way you deal with a very large budget deficit and a very large debt is by increasing taxes on the rich.

08.22 Osborne confirmed that his plans include the wealthy contributing more as well as cuts to the welfare bill.

One of the things I am saying today is the rich need to contribute more, as they have in all my budgets. But you can't just balance the budget from the wallets of the rich - anyone who tells you that is not speaking the truth. You've also got to look at government spending and you've got to look at a very large welfare [bill] and make sure you can find savings there.

08.19 He confirms he will freeze council tax and cap rail fares to help working people and those on middle incomes.

08.17 The rich will continue to "pay the greatest share," he stresses. "The rich are paying more in tax than they did in any one year of the last Labour government."

08.15 Now George Osborne is on BBC Radio 4's Today programme, being given a grilling over whether he will meet his deficit targets. "Our economy is healing but it is taking longer than anybody hoped," he concedes.

08.13 This video from Channel 4 News last night is doing the rounds on Twitter this morning. Party chairman Grant Shapps attempts to beat a retreat from Michael Crick, rather unsuccessfully...

08.06 Rosa Prince, our Online Political Editor, is not impressed with Mr Osborne's performance so far this morning.

Seems to me Osborne is floundering terribly. Comes over really poorly on a programme like 5 live to outline benefits cuts before you are able or willing to set out the mysterious extra contribution from rich.

Omnishambles Budget 2012 all over again.

08.05 Asked about this morning's Financial Times story that the squeeze will continue until 2018, he replies:

Look, who is responsible for creating these debts? I didn't rack up these debts. Ed Balls, who actually wants to take my job, is the man who racked up these debts. I am dealing with the situation I inherited - a very large set of debts. I deeply wish that we had not done that in the boom years, that we had saved money like some other countries. We didn't and we've got to face the world as it is. The way we get out of this is by creating an enterprise culture where this country is seen as a place where people want to come, work and build businesses and invest.

08.00 Asked about his plan to kickstart economic growth, Mr Osborne tells 5 live:

The way you get an economy to grow is you make this an attractive place to set up a business, to invest, to hire someone. Actually there was rather encouraging news in the paper today that some of the biggest companies in the world are thinking of moving from other countries to Britain to have their headquarters and the like because of the tax changes we've made to help.

07.58 Under fire from Nicky Campbell, he replies, wounded: "I didn't rack up these debts."

07.55 Now George Osborne is on BBC 5 Live. He will have no voice left by the time of his speech.

07.50 Our leader this morning welcomes the Tories' veto of a mansion tax, but is dismayed that the Prime Minister feels an obligation to provide his Coalition partners with another raid on the wealthy:

It is a little depressing that the two most senior figures in the Conservative Party can strike such a misleading pose. For they must both be all too aware that the better off already bear a disproportionately large share of the tax burden. The top one per cent of earners pay almost a quarter of all income tax revenues. For the really wealthy, the contrast is even more striking. The 31,000 taxpayers who earn over £500,000 contribute more to the Exchequer than the 13.6 million taxpayers earning £20,000 or less.

Given these figures, it is difficult to work out what the Prime Minister means when he says he wants the richest to pay “a fair share”.

07.36 Asked if he is worried Boris Johnson is stealing his clothes (this is becoming a refrain), he replies:

No, not at all. I think Boris Johnson is a great politician, he's a great Mayor of London. I think it is fantastic that the Conservative Party has some big talents in it like Boris. We all want the same thing - we want to repair the damage done to our country over the last ten years and I think if you look at the Conservative conference here, you'll see a party that has got ideas about how to do that.

07.33 Osborne adds:

I am absolutely on the side of those strivers - the people who want to get on, the people who are working hard for their families and as a result working hard for their country.

07.31 Asked on Daybreak whether he worries about how unpopular he is, Mr Osborne replies:

No. What I've got to do in my job is the right thing for the British economy. I know that is not always the popular thing. But I'm on the side of people watching this programme who want to work hard and get on in life. That means tackling the very big economic problems that this country built up over the last ten years or so. Top of that list are the very large debts we built up and the very expensive welfare system that pays too many families, frankly, to live a life on benefits.

07.28 On ITV's Daybreak now, George Osborne is being asked all the important questions. He confirms the real tension at the heart of this week's conference: while his wife favours watching Downton Abbey at 9pm on Sundays, he prefers to watch Andrew Marr's History of the World.

07.24 George Osborne is embarking on an early morning tour of the TV studios before his speech later today. Asked on BBC Breakfast about squeezing the lower classes while cutting the top rate of income tax, he said:

That is simply not true. If you look at the facts set out there in independent assessments of my budgets they will show that. The rich are paying more - they have paid more in every single one of my budgets. When I became the Chancellor, the tax system allowed some people in the City to pay a lower tax rate than the cleaners who were cleaning for them. That was the tax system that Ed Balls and Ed Miliband designed when they were at the Treasury.

07.14 George Osborne and Iain Duncan Smith write in the Daily Mail this morning about ending the "something for nothing" culture. They write:

We have already announced measures and taken action to reduce the welfare bill by £18billion and we have reformed welfare so that it will be more effective in transforming lives.

But this doesn’t mean the difficult choices on spending have gone away. We will need to look for further savings in most government departments and most areas of spending at the next spending review.

For example, as the Treasury illustrated at the time of the last Budget, if the rate of reductions in departmental budgets in the next spending review period is to be kept the same as the current rate, then the welfare budget would have to be reduced by more than £10billion by 2016-17.

07.10 City A.M.'s Jim Waterson has already been checking out the nightlife in Birmingham.

07.03 In this morning's Telegraph, Iain Martin remembers how crucial David Cameron's speech to conference seven years ago was in persuading Tory members to make him party leader. He will need more than just fine words to win them round this time, he writes:

It is not just MPs who will be thin on the ground; with membership sliding there will be few activists there either. Conference is increasingly the preserve of lobbyists from business and the quangos. Some of the big money donors the leadership relies on are also deeply disillusioned. One very wealthy and usually mild-mannered donor cannot mention the name of either Mr Cameron or Mr Osborne without attaching an expletive, such is his rage at their alleged incompetence.

It falls to Mr Cameron to try to turn it around. Of course he is more than capable of doing so. As he demonstrated in his pre-conference interviews, when he is fired-up the Prime Minister can be highly impressive. Labour, or his Tory critics, would be foolish to underestimate him. Gordon Brown made that mistake when he became Prime Minister, regarding his opponent as a chinless wonder and privileged weakling. In October 2007, in the week of the infamous election that never was, Mr Cameron bounced back with another powerful peroration: “Call that election. We will fight. Britain will win.

06.58 The Independent goes for the jugular this morning, with a piece on the return of the "nasty party", the label Theresa May once gave to the Conservatives in opposition.

06.55 Boris Johnson is on mischevious form today. Writing in his Telegraph column, he says middle-class families are feeling "utterly ignored". In a timely intervention ahead of his conference speech tomorrow that is bound to fuel speculation over his leadership ambitions, Mr Johnson writes:

We need to think how to target this group - the struggling middle - that is currently not being helped, and that is so vital for the economy. At present, we are building new homes for two broad groups of people. Of the roughly 30,000 homes that were built in London last year, a huge chunk were "affordable homes" of one kind or another, and then there was another sizeable chunk of top-end stuff - swish houses and apartments, often for foreign buyers.

We are not doing as the Victorians did, and providing new stock to be bought by people in the middle - on household incomes from £30,000 to £64,000; and they are feeling utterly and understandably ignored. They cannot get the mortgages they would need, not at current prices, and not with lenders in their current mood. They have to live at a great distance from their place of work, and spend huge quantities on travel and hardly get to see their children in the evenings. They are obliged to rent at even higher prices. In the past 10 years, the number of rented households in London has doubled, and rents went up 12 per cent last year alone.

06.50 Today's schedule features Iain Duncan Smith, Eric Pickles and Francis Maude, and begins at 9am with a very energetic sounding debate for that time in the morning: "The UK in Action", including Tory representatives from across the UK. But the highlight will be George Osborne's speech, shortly after 11am. He is expected to ask to "finish the job we have started" in eliminating the deficit, confirming plans to cut a further £10 billion from the welfare bill. He will say:

Just as we should never balance the budget on the backs of the poor; so it's an economic delusion to think you can balance it only on the wallets of the rich

.

Yes, we inherited a tax system where some in the City were paying lower tax rates than their cleaners. That was wrong and we were right to change it.

But in the same way, it is wrong that it's possible for someone to be better off on benefits than they would be in work."

06.45 Good morning and welcome to our live coverage of day two of the Conservative Party Conference.