Cameron sets out economic policy
David Cameron has outlined the main tenants of Conservative fiscal policy in a keynote speech today at the London School of Economics.
The opposition leader began by referring to recent market turbulence, brought on by the mortgage crisis in the United States.
He claimed Gordon Brown’s tenure as Chancellor had left the domestic economy ill-prepared to weather such instabilities and generally “vulnerable to global shocks”.
Mr Cameron said: “Gordon Brown’s reckless strategy of excessive borrowing, leaving our economy with the largest structural deficit in Europe, has left us ill-prepared to respond if the turbulence spreads more widely.”
By contrast, Mr Cameron insisted he was dedicated to developing a “secure framework for economic stability”.
He reiterated controversial proposals made last month by a Conservative policy group, which suggested deregulation was the key to economic prosperity.
The Economic Competitiveness Policy Group led by John Redwood said corporation tax – payable on business profits – should be reduced from 30 pence in the pound to 25 pence.
Although these proposals were widely criticised for being fiscally irresponsible, Mr Cameron stood firmly by them.
He said: “It’s time for modern Conservative supply-side reform to stimulate higher economic growth.
“We need deregulation to promote commercial competitiveness. We need decentralisation to promote public sector productivity. And overall, we need to share the proceeds of economic growth between higher investment in our public services and lower taxes.”
Mr Cameron accused the prime minister of taking advantage of current public consensus on the environment to introduce a range of dishonest green taxes.
He claimed that green taxes under a prospective Conservative government would only be replacement taxes, rather than additional stealth taxes.
Mr Cameron’s attempt to bolster his green credentials comes days before the party publishes a report setting out its environmental policy.
The leader hinted at the contents of this report, saying he would “raise green taxes, and use the proceeds to reduce taxes elsewhere”.
Labour quickly jumped to defend themselves, however, claiming that Mr Cameron had a growing “credibility problem” when it came to fiscal policy.
Chief secretary to the Treasury Andy Burnham said: “Yesterday, the Conservatives were saying they would be cutting green taxes. Now today, David Cameron has confirmed they will be raising them.
“The Tories have promised to tax less and borrow less at the same time as making billions of pounds of extra spending commitments. They have created a huge black hole in their finances threatening a return to the economic instability of the last Tory government.”
