UK not ready yet to fund another bailout

Speaking as finance ministers meet in Mexico for the G20 summit, the Chancellor said extra funds would not be handed over until countries who use the struggling single currency commit resources themselves.

In an interview with Sky News, Mr Osborne said: “We are prepared to consider IMF resources but only once we see colour of eurozone money and we have not seen this.

“While at this G20 conference there are a lot of things to discuss, I don’t think you’re going to see any extra resources committed here because eurozone countries have not committed additional resources themselves, and I think that quid pro quo will be clearly established here in Mexico City.”

The Chancellor also refused to reveal if he would be increasing the personal tax allowance to £10,000 at next month’s Budget.

“Any tax cut would have to be paid for... what we are not going to do in the Budget is borrow any more money to either increase spending or cut taxes,” Mr Osborne said.

“We can’t have any deficit finance measure in that sense because getting the Budget deficit down which is now happening is an incredibly important part of keeping economic stability in Britain.”

Mr Osborne also stood by his decision to rule out any further duty cuts for motorists.

“We’ve taken action in last two fiscal statements either to avoid a fuel duty increase that was coming or to cut fuel duty,” he said.

“Fuel duty is 6p lower than it would have otherwise been. I have absolutely shown willingness to respond to international fuel increases and have taken action this year to tackle fuel duty rises, which were planned by the last Labour government.”

Mr Osborne said the eurozone crisis “remains probably the biggest source of global instability” and was probably going to be the “centrepiece” of the G20 discussions.

Referring to the Liberal Democrats’ ambition to bring in a mansion tax or increase the number of council tax bands, he said: “We have already taken measures to make sure the tax system is fairer. I increased capital gains tax for wealthier people in my first Budget, and I’ve taken action on stamp duty avoidance.”