Conservative conference

I won't be pushed into making cuts, Osborne warns the right

The shadow chancellor, George Osborne, vowed yesterday never to be "pushed or pulled" by the tax-cutting right, and warned that the Tories would never win the next election if "people believe our tax policy comes at the expense of public services". At the same time he said he wanted to rebalance the tax system so that polluting goods were taxed more than individuals.

David Cameron said the new goal was "pay as you burn, not pay as you earn". Mr Osborne also hinted the party would help families, possibly through a transferable tax allowance, a policy once advanced by David Willetts as shadow welfare spokesman.

He gave a strong nod towards business tax cuts, echoing John Redwood in arguing that they had been integral to the success of the Irish economy.

The shadow chancellor also promised to simplify the tax system, saying: "Let us end the monstrosity of the tax affairs of the poorest being more complicated than the tax affairs of the richest."

He said that the imminent Independent Tax Reform Commission chaired by Lord Forsyth would offer a menu of ideas rather than a package that had to be adopted or rejected wholesale. The goal, he said, was for public spending to grow more slowly than the economy as a whole, but he set no target for how big the public sector should be as a proportion of GDP.

But Mr Osborne used the bulk of his speech to confront what he described as the few in the party who want upfront tax cuts now. He cited both Lady Thatcher and the former chancellor Lord Howe as champions of stability over tax cuts.

"Let no one ever portray sound money as a betrayal of Conservative principles. For sound money is the oldest principle of all. As Margaret Thatcher herself said, 'I am not prepared to go on with tax reductions if it meant unsound finance'. She was right on that as on so much else."

Adopting a confrontational tone, he said: "To those who still want us to make upfront promises of tax cuts now we say: 'We will not back down. We will not be pushed or pulled, we will stick to our principles. We will do what is right. I am not going to write my 2009 budget in 2006'."

He also put the case against tax cuts in a political context: "Surely we must have learnt from three election defeats this simple truth: we must win the argument on the economy. We will never do that if people believe that our tax policy comes at the expense of their public services."

Mr Osborne argued his determination to show discipline was an indication that the Tories were again serious players in British politics. He also sought to highlight the party's modernity, introducing the chief executive of Google, Eric Schmidt, and putting great emphasis on corporate social responsibility, and a commitment to help families balance work and life better.

Mr Schmidt told the conference: "We have an information explosion in the world which is unparalleled. The internet is both a unifier and a polariser, the truth is much faster on the internet but falsehoods are too. More globalisation, more tribalism. The internet makes people more cosmopolitan but there are also more hate groups. These are the paradoxes that you as our political leaders will have to deal with."

Today's best video

Find your MP

Today in pictures