Tax cuts ruled out 'for five years'

The Treasury chief secretary, Danny Alexander, ruled out a cut in the overall tax burden for up to five years last night. The Liberal Democrat minister responsible for cutting the £155bn deficit gave little hope of reducing the level of tax during this parliament. "The tax burden is necessary as a significant contribution to getting the country's finances in order. So it will have to stay at that level for quite some time," he told The Observer. He added that he could not "take decisions for five years down the line".

George Osborne, the Chancellor, will seek to shift the focus this week from cuts to plans for growth. He is expected to announce that from 6 September all new companies outside London, the south-east and the east regions will be eligible for a "National Insurance holiday", exempting them from paying the first £5,000 of contributions on up to 10 employees for 12 months.