Tory pledge to build fairer society

The shadow chancellor accused Labour of failing "on their own terms" and creating a "more unfair society".

Mr Osborne said it was his "overall ambition" to reduce taxes, but welfare reform, support for families and increased educational opportunities would be at the heart of a Conservative government.

The shadow chancellor made the comments on BBC Radio 4's Today programme ahead of a speech to think tank Demos aimed at knocking down Prime Minister Gordon Brown's expected "fairness" relaunch before it has even begun.

In a clear grab for Labour's core territory, Mr Osborne said his party was now best-placed to deliver for those on lowest incomes.

"What government should be focused on is raising the incomes and the aspirations and the opportunities for the millions of people who are stuck on low incomes, and that is where this Government has failed - not because they are bad people, not because they don't have noble ambitions, but because their measure, which is entirely reliant on the state, which is about redistribution, has failed - failed on their own terms," Mr Osborne said.

"Our education system is failing to spread opportunity, our welfare system is keeping people out of work, our tax system makes it extremely difficult for those on low incomes to get off those low incomes because those marginal tax rates are so high.

"Labour has failed, it has created a more unfair society, and I think there is a real opportunity for the Conservative Party now to lead this debate."

Mr Osborne said "simply chucking money at people" was not the answer, but insisted the Tories would not scrap the tax credits system.

In his speech later, Mr Osborne is expected to accuse Mr Brown of desperately grasping for words that focus groups told him would resonate with voters.