Labour has offered tax breaks to homeowners and small businesses as part of a five-point plan to boost growth which shadow chancellor Ed Balls said could help Britain avoid a decade of economic stagnation.
His calls for a temporary cut to 5% in VAT on home improvements and a national insurance holiday for firms with fewer than 10 employees taking on new staff were welcomed by builders and small businesses.
But Tories accused Labour of being "addicted to debt", claiming the cost of Mr Balls' plan would add £20 billion to Government borrowing.
The shadow chancellor used his keynote speech to Labour's annual conference in Liverpool to try to rebuild the party's damaged credibility on the economy, promising to exercise "iron discipline" on spending.
To the dismay of some activists he said Labour could not promise to reverse coalition cuts and would use any windfall from the sale of part-nationalised banks to pay off debt, not boost spending.
Promising "fiscal responsibility in the national interest", he told delegates: "It will not be enough to expose that David Cameron and George Osborne have got the economy badly wrong. We will never have credibility unless we have the discipline and the strength to take tough decisions."
Transport union boss Bob Crow of the RMT - which is not affiliated to Labour - said Mr Balls showed "a bizarre set of priorities" in earmarking cash from bank shares for debt-reduction rather than schools and hospitals.
Len McCluskey, general secretary of Britain's biggest union Unite, questioned Mr Balls' approach, warning that "Labour ... cannot simply be the party that cuts a little less than the Tories. That will not win the next election."
Tories said Mr Balls had failed to come up with a credible plan to deal with the deficit.
Treasury minister Justine Greening said: "Announcing £20 billion new spending after claiming he would be tough on the deficit shows Ed Balls has zero credibility. He's ducked all the tough decisions and refused to apologise for Labour overspending. Labour is still dangerously addicted to debt."
