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Last Updated: Tuesday, 3 October 2006, 12:40 GMT 13:40 UK
Osborne dismisses tax cut calls
George Osborne
Mr Osborne is aiming to tackle his critics head-on
Shadow chancellor George Osborne says he is ready to take on Conservatives who are demanding tax cuts with the pledge: "We will not back down."

Lord Tebbit and Edward Leigh have been among senior party figures calling for tax promises. But Mr Osborne insisted: "We will not be pushed or pulled."

During his keynote conference speech in Bournemouth, he said he would not write the Budget for 2009 now.

Calls for the Tories to keep their tax cutting ethos have dominated the week.

In his speech, Mr Osborne accepted the principle of lower taxes.

But he claimed it was high mortgage rates under John Major's government, combined with the effects of Black Wednesday when Britain crashed out of the ERM, that had kept the party out of government for a decade.

Principled stand?

He said the Tories were now being viewed as a party of government and needed to show discipline and responsibility.

That was why he had a clear message to opponents of his tax policy stance: "To those who still want us to make up front 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.

"For the British people are sick of politicians who promise more than they deliver. We will deliver more than we promise."

HAVE YOUR SAY
Forget tax cuts. We do not know if we can afford them in three or four years' time
Geoff, Glastonbury

Many of those demanding such a policy are Thatcherites, so Mr Osborne quoted the former Prime Minister Margaret Thatcher in his defence.

"Sound money is the oldest Conservative principle of all. As Margaret Thatcher said: 'I am not prepared ever to go on with tax reductions if it meant unsound finance'," he said.

His comments on tax come after a series of demands on Mr Cameron from senior party figures to revert to the traditional Tory policy of offering cuts.

Former party chairman Lord Tebbit and backbencher Mr Leigh have been in the forefront of demands for Mr Cameron to make a clear statement on the issue straight away.

John Redwood
Ex-minister John Redwood has set out a case for tax cuts

Mr Leigh says Mr Cameron risks becoming a "recruiting agent" for the UK Independence Party because of his failure to offer voters "robust Conservatism".

He told a conference fringe meeting the party must start making the intellectual case for tax cuts now or face losing the next election.

Ex-minister John Redwood has published a pamphlet setting out the case for tax cuts, although he has insisted he is not at odds with Mr Cameron and is not demanding instant policies.

Learnt nothing

Mr Osborne delivered a stern rebuttal of their case, insisting it was economic policies of that type that led to the Tories suffering three election defeats in a row.

"We must win the argument on the economy. We will never do that if people believe our tax policy comes at the expense of their public services.

Lady Thatcher
Lady Thatcher spoke of sound money
"That is why we will share the proceeds of growth between the lower taxes this country needs and the increases in spending on public services every government should provide.

"And we will never ever win the argument on tax - or anything else for that matter - if people fear for one moment that we might endanger the stability of the economy, the low mortgage rates and low inflation families depend on.

"If we haven't learnt that in our long years in opposition then we have learnt nothing.

"High mortgage rates and the failed ERM experiment that produced them are part of the reason we have been out of office for a decade. Well, I am not going to allow that to happen.

"I want people to know, we will never link our currency or join the euro and I want people to know this from us - we will never take risks with inflation or interest rates.

"I want people to hear this party say with one voice that economic stability will always come first."




VIDEO AND AUDIO NEWS
Shadow chancellor George Osborne's conference speech



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