Conservative conference: Theresa May declares 'end of austerity' with boost to new homes as she tries to move past Brexit squabbling

Labour cast doubt on the claim while one Tory MP joined his name to Brexit rebels calling on her to step down

Theresa May has officially declared the end of austerity as she opened the way for millions of pounds of new borrowing to build council homes across the country.

In a speech that began with the prime minister dancing on to the stage, she told cash-strapped British families that after almost a decade of cuts “the end is in sight” and pledged to detail increased spending next year.

Building on the theme from the conference stage, she also announced a fuel duty freeze expected to cost some £800m and a cancer strategy to improve early diagnosis.

Labour immediately cast doubt on Ms May’s pledge, pointing to the record of successive Tory governments and claiming that “as long as Britain has a Conservative prime minister, we’ll never see an end to austerity”.

Ms May’s big focus on domestic policy was also a clear attempt to drag her party away from divisive Brexit squabbling, which she warned was threatening to derail the government’s attempts to secure withdrawal from the EU.

She attacked Labour leader Jeremy Corbyn, but also took swipes at Boris Johnson, who had given his own big speech just 24 hours earlier, attacking Ms May’s policy agenda.

The spectre of her leadership rival had briefly threatened to overshadow her speech when one of his acolytes, James Duddridge MP, submitted a letter of no confidence in the PM and called on her to step down over her Brexit.

There had also been concerns of a repeat of last year’s fiasco, which saw the PM lose her voice on stage, stand on a crumbling set and handed a P45 in a comedy stunt.

But Ms May defied expectations when the Abba song ‘Dancing Queen’ – which she once chose as a favourite on the Desert Islands Discs radio show – was played as she walked on, with the prime minister breaking into the same robotic dance that saw her grab headlines recently on a trip to Africa.

Officials later claimed they were unaware the PM would dance ahead of what was to be the biggest speech of her career. Either way, it appeared to put both the audience and leader at ease.

The British people need to know that the end is in sight and our message to them must be this – we get it

Prime minister Theresa May

In a key section of her speech, Ms May said: “After a decade of austerity, people need to know that their hard work has paid off. Because of that hard work, and the decisions taken by the chancellor, our national debt is starting to fall for the first time in a generation.

“This is a historic achievement. But getting to this turning point wasn’t easy. Public sector workers had their wages frozen. Local services had to do more with less. And families felt the squeeze.

She added: “The British people need to know that the end is in sight and our message to them must be this – we get it.”

Her officials explained that at the comprehensive spending review next year, the first since 2015, the government will lay out an overall spending envelope larger than the previous one.

They would not at this point guarantee the spending would increase more than inflation or as a proportion of GDP, instead pointing to Philip Hammond’s budget later this year as a moment when further detail would emerge.

But the promise on the council housing borrowing was specific, with Ms May saying: “At last year’s conference I announced an additional £2bn for affordable housing, but something is still holding many [councils] back.

“There is a government cap on how much they can borrow against their housing revenue account assets to fund new developments.”

She went on: “Today I can announce that we are scrapping that cap.”

Ms May’s spokesman later pointed to councils’ house building figures in the 1980s, which he said often numbered in the tens of thousands but had fallen to the hundreds in the early 2000s.

He confirmed extra council borrowing would be taken on to central government’s balance sheet, creating a challenge for the chancellor to continue to hit his debt and deficit reduction targets.

The Resolution Foundation think tank questioned whether those debt targets could be met if it is really the “end of austerity”. A spokesman said: “If austerity means aiming to reduce the deficit then clearly it’s far from over. The Treasury is formally committed to the long-held ambition to balance the budget – but achieving that is still a very long way off.

“At the Spring Statement last March the government wasn’t on track to reach that goal until 2027-28, with further tax rises and spending cuts required to get us there. That’s less ending austerity and more a decade of it to go.”

The move was called “excellent news” by the Chartered Institute for Housing, but it also pointed out that with any increase in numbers, councils had to make sure that the “right homes” are built in the right places, with concern over whether new properties will be truly affordable.

Officials also appeared unsure on Wednesday evening over whether scrapping the cap would need primary legislation and as to exactly when the change would be implemented.

The prime minister tried to challenge the idea that Conservatives are obsessed with debt and deficit data, in a passage in which she said the impact of lower living costs could be measured in “the look on a daughter’s face when her mum says she can have the bike she wants for her birthday”.

She added: “Today I can confirm, given the high oil price, the chancellor will freeze fuel duty once again in his budget later this month.

“Money in the pockets of hard-working people.”

In a section relating to the NHS she told how her goddaughter had recently died from cancer as she outlined plans to spare thousands of others the “pain of losing a loved one before their time”.

She added: “A few years ago, my goddaughter was diagnosed with cancer. She underwent treatment and it seemed to be working.

“But then the cancer came back. Last summer, she sent me a text to tell me that she was hoping to see another Christmas. But she didn’t make it.”

She said the new strategy would increase the early detection rate from one-in-two today, to three-in-four by 2028, saving some 55,000 lives.

She the government aimed to achieve it by lowering the age at which people are screened for bowel cancer from 60 to 50, by investing in the latest scanners and by building more rapid diagnostic centres.

Macmillan Cancer Support highlighted the need for a “costed plan” and Cancer Research UK said the government needed to match words with actions.

Turning her guns on the Labour leader, Ms May attacked Mr Corbyn for pulling his party to the left and accused him of offering “bogus solutions that would make things worse”, pointing to John McDonnell’s employee ownership scheme as an example that she claimed is “a giant stealth tax on enterprise”.

But Labour Party chair Ian Lavery MP said the country is “crying out for real change” and accused the prime minister of “tinkering around at the edges”.

He went on: “Austerity is not an economic necessity. It is a political choice made by the Conservatives to hack away at our public services and communities, leaving workers worse off while gifting huge tax cuts to big business.

“And as long as Britain has a Conservative Prime Minister, we’ll never see an end to austerity.”

He was backed by unions Usdaw and Unison who both said that claims the prime minister is ending austerity would “ring hollow” with public sector workers who failed to see pay rises for almost a decade.

In a sign that the PM is preparing to evolve her Brexit proposals she failed to use the word “Chequers” a single time, with The Independent having reported earlier this week that ministers now believe it to be a “damaged brand”.

It is likely that she will put developed plans to the cabinet later this week ahead of a European Council summit in mid-October.

But in the meantime she had a warning for both Tory eurosceptics looking to defeat her strategy and pro-EU rebels pushing for a new Brexit referendum, saying: “Think for a moment what it would do to faith in our democracy if – having asked the people of this country to take this decision – politicians tried to overturn it.

“Those of us who do respect the result – whichever side of the question we stood on two years ago – need to come together now.

“If we don’t – if we all go off in different directions in pursuit of our own visions of the perfect Brexit – we risk ending up with no Brexit at all.”

In a particular attack on Boris Johnson, who was once reported to have said “f*** business” after big firms spoke out about Brexit, Ms May said there was only one four-letter word ending in the letter k that the Conservatives should use in relation to the private sector, that they would “back” business.