Chancellor George Osborne has ruled out unfunded tax cuts or increases in public spending, warning: "You can't borrow your way out of debt."
Speaking to the Conservative Party conference in Manchester, Mr Osborne rejected calls to loosen his deficit reduction policy, warning that even a few billion pounds worth of additional spending would put at risk Britain's credibility on the international markets and force up interest rates.
The warning came as the Chancellor announced an £800 million one-year council tax freeze, a £200 million boost for science and £150 million for mobile phone masts as a stimulus to growth, funded out of "eliminating waste and inefficiency" across Whitehall departments.
Mr Osborne said he had heard calls from Labour and some Tory backbenchers to deliver tax cuts and extra spending to kick-start Britain's stalled growth, and considered all of them carefully.
But he said it was "an illusion" to think that the injection of £5 billion or £10 billion into the economy would revive growth: "Borrowing too much is the cause of Britain's problems, not the solution," he told the conference.
"We would 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 in the international bond markets, swirling around ready to pick off the next country."
Mr Osborne said Britain's current economic troubles were caused by the "catastrophic mistakes" of the previous Labour administration, as well as banks which "let down their customers, let down their shareholders and let down this country".
In a set of measures to assist small businesses, Mr Osborne confirmed that the minimum time for an employee to work before making a claim of unfair dismissal will be increased from one year to two. And he announced a new fee payable by those taking cases to tribunals, which will only be returned if they win their case.
Mr Osborne also announced plans to inject money directly into parts of the economy which need it most, such as small businesses, in a process known as "credit easing".
In comments likely to anger environmentalists and dismay the Conservatives' Liberal Democrat coalition partners, Mr Osborne said that he did not want to see Britain's carbon emission reductions proceeding any faster than the rest of Europe.
Chancellor George Osborne has ruled out unfunded tax cuts or increases in public spending, warning: "You can't borrow your way out of debt."
Speaking to the Conservative Party conference in Manchester, Mr Osborne rejected calls to loosen his deficit reduction policy, warning that even a few billion pounds worth of additional spending would put at risk Britain's credibility on the international markets and force up interest rates.
The warning came as the Chancellor announced an £800 million one-year council tax freeze, a £200 million boost for science and £150 million for mobile phone masts as a stimulus to growth, funded out of "eliminating waste and inefficiency" across Whitehall departments.
Mr Osborne said he had heard calls from Labour and some Tory backbenchers to deliver tax cuts and extra spending to kick-start Britain's stalled growth, and considered all of them carefully.
But he said it was "an illusion" to think that the injection of £5 billion or £10 billion into the economy would revive growth: "Borrowing too much is the cause of Britain's problems, not the solution," he told the conference.
"We would 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 in the international bond markets, swirling around ready to pick off the next country."
Mr Osborne said Britain's current economic troubles were caused by the "catastrophic mistakes" of the previous Labour administration, as well as banks which "let down their customers, let down their shareholders and let down this country".
In a set of measures to assist small businesses, Mr Osborne confirmed that the minimum time for an employee to work before making a claim of unfair dismissal will be increased from one year to two. And he announced a new fee payable by those taking cases to tribunals, which will only be returned if they win their case.
Mr Osborne also announced plans to inject money directly into parts of the economy which need it most, such as small businesses, in a process known as "credit easing".
In comments likely to anger environmentalists and dismay the Conservatives' Liberal Democrat coalition partners, Mr Osborne said that he did not want to see Britain's carbon emission reductions proceeding any faster than the rest of Europe.