The Tories are now the right party to create a fairer society because the Government has failed to raise the incomes, aspirations and opportunities of Britain's poorest people, George Osborne said today.
The shadow chancellor accused Labour of failing "on their own terms" and creating a "more unfair society".
Mr Osborne said it was his "overall ambition" to reduce taxes but welfare reform, support for families and increased educational opportunities would be at the heart of a Conservative government.
The shadow chancellor made the comments on BBC Radio 4's Today programme ahead of a speech to think tank Demos aimed at knocking down Prime Minister Gordon Brown's expected "fairness" relaunch before it has even begun.
In a clear grab for Labour's core territory, Mr Osborne said his party was now best-placed to deliver for those on lowest incomes.
"What government should be focused on is raising the incomes and the aspirations and the opportunities for the millions of people who are stuck on low incomes, and that is where this Government has failed - not because they are bad people, not because they don't have noble ambitions, but because their measure, which is entirely reliant on the state, which is about redistribution, has failed - failed on their own terms," Mr Osborne said.
"Our education system is failing to spread opportunity, our welfare system is keeping people out of work, our tax system makes it extremely difficult for those on low incomes to get off those low incomes because those marginal tax rates are so high.
"Labour has failed, it has created a more unfair society, and I think there is a real opportunity for the Conservative Party now to lead this debate."
Mr Osborne said "simply chucking money at people" was not the answer, but insisted the Tories would not scrap the tax credits system.
It would be part of a wider package, he said, adding: "We will keep tax credits, but we will add to the battle on poverty other things, like welfare reform, like extending educational opportunity, like supporting families, and these Conservative methods of achieving progressive goals are likely to be far more successful and create a fairer society."
Mr Osborne said it was "obviously" his ambition to reduce taxes, but only when the country can afford it.
"At the moment borrowing is rising and that's a real issue," he said.
In his speech later, Mr Osborne is expected to accuse Mr Brown of desperately grasping for words that focus groups told him would resonate with voters.
He will highlight three key characteristics of a fair society - properly rewarding people for their effort and ability, equality of opportunity, and not saddling future generations with the costs of current mistakes - arguing that the right is leading the agenda on all three.
It follows a pamphlet published earlier this week in which Mr Osborne said: "The truth is Gordon Brown's old-fashioned leftist idea that 'only the state can guarantee fairness' has led to a decade of top-down state control policies that have made our country less fair."
He added: "First it was 'change', then it was 'aspiration' and earlier this year it was all about Government being 'on your side'.
"Now we're told, before it's even started, that the next Gordon Brown relaunch will be about 'fairness'.
"But this latest desperate relaunch will sink, just like the others have, because under Labour Britain has become more unfair."
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