Osborne rules out tax cuts 'risk'
Chancellor George Osborne has rejected calls for temporary tax cuts to boost the economy, warning that they would put Britain's credit rating and low interest rates at risk.
He unveiled a package of help for small business, investment in science and infrastructure and an £800 million council tax freeze, which he said could be funded with savings on Whitehall waste and inefficiency without affecting the drive to reduce the deficit.
The Chancellor told the Conservative Party conference that the Government was taking an "activist" approach to helping families and businesses "ride out the storm" of global economic crisis.
But Labour dismissed his speech as "a hotch-potch of small measures and re-announcements" which did not match up to the scale of the difficulties facing the country.
One of Mr Osborne's most prominent Tory critics, Commons Treasury Committee chairman Andrew Tyrie, who last week warned that the Government lacked a "coherent and credible" strategy for growth, said he was "greatly encouraged" by the announcements. But the Chichester MP was forced to deny being "nobbled" by Downing Street, after the BBC reported that he was given a "talking to" by aides of David Cameron before facing the TV cameras.
Shortly after the Chancellor spoke in Manchester, he was given a big boost by ratings agency Standard and Poor's, which reaffirmed the UK's coveted triple-A status.
Mr Osborne said it was an "illusion" to think that injecting £5 billion or £10 billion into the economy through temporary tax cuts or extra spending - as Labour advocates - would transform the economy.
"We'd be risking our nation's credit rating for a few billion pounds more, when that amount is dwarfed by the scale and power of the daily flows of money on the international bond markets, swirling around ready to pick off the next country that lacks the will to deal with its debts," he said.
"Conference, we will not take that risk. We are in a debt crisis. It's not like a normal recovery. You can't borrow your way out of debt."
Mr Osborne confirmed plans to offer £800 million to enable all councils in England to freeze council tax for the second year in succession, saving an average family £72. And he said cash would be made available for devolved governments to run similar schemes in Scotland and Wales.