UK Conservatives say stability comes before tax cuts

BOURNEMOUTH, England, Oct 3 (Reuters) The Conservative Party will not put lower taxes before economic stability, Treasury spokesman George Osborne said today, as he urged bickering members to unite around his prudent stance on tax.

Osborne said he wanted lower taxes and believed they would help Britain compete in the global economy, but he told his party's annual conference that promises of tax cuts had led them to three successive election defeats.

''I want people to hear this party say with one voice that economic stability will always come first. And let that be clear when we talk about taxes,'' he told delegates.

The party -- struggling to overcome an image of economic incompetence left by the last Conservative administration -- would never take risks with inflation or interest rates, he said.

Right-wing parliamentarians are engaged in a row with Conservative leader David Cameron and shadow cabinet colleagues over their refusal to offer lower taxes to the electorate.

''Sound money is the only sustainable path to lower taxes. It is also the bedrock upon which we build simpler, flatter, and fairer taxes,'' Osborne said.

Osborne reiterated Cameron's promise that the party would ''share the proceeds of growth'' between lower taxes and increases in public spending.

''We must win the argument on the economy. We will never do that if people believe our tax policy comes at the expense of their public services,'' he said.

Osborne also vowed -- to loud applause from delegates -- that a Conservative government would never take Britain into the single European currency.

He said the Conservatives would slash red tape for businesses and provide help for young families to buy homes.

REUTERS LL VC1833