Tories set out stall on tax
Government spending will consume less of the UK’s wealth under a Tory government, shadow chancellor Oliver Letwin has argued today.
Setting out his medium term expenditure strategy, Mr Letwin pledged to cut government spending as a share of gross domestic product (GDP) from 42 to 40 per cent over six years.
His speech to the Bow Group, a right-wing think-tank, commited his party to matching Labour spending on health. However he said that NHS bureaucracy would have to be cut.
But some £35 billion can be cut from spending, Mr Letwin said.
His cuts include freezing Civil Service recruitment, and trimming bureaucracy.
Letwin told BBC One’s Breakfast with Frost yesterday: “I want to have the growth in public spending being about a per cent lower each year than the growth of the economy and that produces what I was describing as the dividend which is indeed by 2011, as I will show tomorrow, around £35 billion a year.”
He said “I am absolutely determined to follow the path of fiscal conservatism to which Mr Brown was once committed, and from which he has recently been diverging.”
He added: “A Conservative Government, if elected at the next election, will maintain high levels of growth in spending on hospitals and schools.
“But a Conservative Government, if elected at the next election, will not rely on tax rises to fund structural increases in public spending as a proportion of GDP. On the contrary, we will ensure that public spending over the cycle grows more slowly than GDP, so that the share of national income taken in taxes can gradually and substantially be reduced.”
But critics claim the new policies would have the reverse effect, adding at least £30 billion to public spending.
