Osborne rejects tax cuts calls

He unveiled a package of help for small business, investment in science and infrastructure and an £800m council tax freeze, which he said could be funded with savings on Whitehall waste and inefficiency.

The Chancellor told the Conservative Party conference the Government was taking an “activist” approach to helping families and businesses “ride out the storm” of global economic crisis.

He also gave rural parts of Yorkshire a massive boost by pledging £150m to extend mobile coverage to 99 per cent of homes, up from 95 per cent at the moment.

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, although he was forced to deny being “nobbled” by Downing Street.

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 £5bn or £10bn into the economy through temporary tax cuts or extra spending – as Labour advocates – would transform the economy.

He said: “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.

“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 £800m to enable all councils in England to freeze council tax for a second year, saving an average family £72. He said cash would be made available for the devolved governments to run similar schemes in Scotland and Wales.

He announced plans for the direct injection of state cash into the small business sector by buying bonds under a process known as “credit easing”, which aides said would deliver billions of pounds of capital and help firms which have struggled to obtain credit on reasonable terms from the banks.

Mr Osborne acted to relieve small business fears of vexatious employment tribunal claims, by launching a consultation on new fees to be paid by all applicants. The new charges, due for introduction in 2013, are likely to be set at around £150-£250 per case –rising to more than £1,000 if there is a full hearing – and will only be returned if applicants win their cases.

Coupled with an increase from one to two years in the minimum qualification period for unfair dismissal claims, Mr Osborne said the change would give companies more confidence to take on new employees.

The Chancellor also announced almost £200m for science, including a £50m research centre to commercialise the Nobel Prize-winning discovery by Manchester University scientists of the ultra-thin conducting material graphene.

And he said the Government will spend £150m on mobile phone masts to extend coverage to 99 per cent of the country, a move welcomed by the Country Land and Business Association.

Mr Osborne, who flies to Luxembourg today to join eurozone finance ministers in emergency talks on the sovereign debt crisis, warned that Britain could not be “immune” to instability in the single currency area.

But he insisted he was “optimistic for the future” and believed that the sacrifices being made would not be in vain.

Labour’s Treasury spokeswoman Angela Eagle said Mr Osborne should adopt Shadow Chancellor Ed Balls’ package of VAT cuts, national insurance breaks and infrastructure spending to boost the economy.

“Far from riding out the storm, George Osborne ripped out the foundations of the house as the storm was brewing by choking off the British recovery last autumn,” she said.

Warning over moves to cull number of MPs

PRIME Minister David Cameron has warned his party they must not block his plans to cut 50 MPs despite a senior Tory branding some of the changes to constituency boundaries as “mad and insane”.

The Prime Minister has acknowledged there are “problems and issues” with some of the proposed new constituencies which have been drawn up, three of which cross the boundary between West and North Yorkshire.

The Tories are preparing to appeal against the proposals in Yorkshire, which will lose four of its 54 seats, and co-chairman Baroness Warsi said some seats in the region have been “carved out in a very unusual way”.

But Mr Cameron has appealed to activists and MPs that once the appeal process is completed, they must drop any continuing protests and allow the plans to go through.

“I know there might be problems and issues with the boundaries, it’s absolutely right and fair that every seat is the same size and we have a House of Commons of 600,” Mr Cameron told activists.

“Whatever is happening in our own constituencies we have all got to work together to deliver these boundary changes. They’re right for Britain, they’re right for the Conservative Party, they need to go through.”

The Government wants to cut the number of MPs from 650 to 600 to save £12m a year and ensure most politicians represent a similar number of voters, but the first draft of new constituencies has sparked an angry response, with complaints that communities are being torn apart and others with no shared identity being put together in a single seat.

A consultation is now under way, and Tories in Yorkshire met last week to agree their response, which will argue that the border between West and North Yorkshire should be respected.

The Yorkshire Post understands Labour is likely to accept most of the proposals in Yorkshire.