Shadow chancellor George Osborne made an attempt to steal Labour's mantle as the "party of the poor" today with a signal that the Tories would cut taxes for the lowest paid.

In a speech to the Demos think-tank, Mr Osborne declared that he wanted to see "not just lower taxes but fairer taxes" and pointed out that the least well-off were being hit by punishing rates of tax. He highlighted the public outcry against the abolition of the 10p tax rate.

Amid new figures suggesting that public deficit may to soar to £60 billion, Mr Osborne also vowed that the Tories would change the Treasury's fiscal rules and end the "gross irresponsibility" with the nation's finances. He said record borrowing was "deeply unfair" on future generations.

But Labour seized on his remarks on borrowing, claiming that they suggest the Conservatives would rather cut spending or even raise the tax burden than increase borrowing to balance Britain's books.

Any move to restore the 10p tax rate would inevitably lead to other spending cuts, critics claimed. In his speech, Mr Osborne said: "We understand that tax can undermine fair rewards for effort, so we want to see not just lower taxes but fairer taxes too.

"The public outcry against the 10p tax rate said something very interesting about the British people's sense of fairness.

"Even those on middle incomes who found themselves better off from the tax changes felt it was profoundly unfair that they were benefiting at the expense of higher tax bills for those on lower incomes.

"It was a good old-fashioned British tax revolt. Similarly unfair, are the extremely high marginal tax rates faced by those on low incomes."

He said that according to the Department of Work and Pensions, when someone on £100 a week increases their income, for every pound of extra pay, they take home just 6p.

Treasury minister Angela Eagle counter-attacked, claiming that Mr Osborne's "Cameronomics" would mean deep spending cuts.

She said the shadow chancellor had admitted he was only using the message of "unfairness" because focus groups had shown it was a public concern.

• 

  Lenny Henry: 'Maybe one day we can have a black Doctor Who'

  Shortlisted at today's Evening Standard theatre awards for his role as Othello, Lenny Henry has come a long way from black and white minstrels

  ---

• 

  Spread of the Jedhead

  Jedward, voted off the X-Factor this weekend, are the most obvious proponents of the sticky-uppy look - but the style crosses boundaries of age, gender, sexuality and taste, says Nick Curtis

  ---

Steamy scenes for Purnell in Turkish bath

Scheming over the future of the Labour Party continues even in the most unlikely places

All stories