Before 1997 Gordon Brown promised to match Tory budget plans and George Osborne has made a similar pledge this morning. Writing in The Times, Mr Osborne says that the Tories will deliver year-on-year real increases in public spending and will match Labour’s spending plans for the next two years. The announcements are an attempt to pre-empt any Labour charge that the Tories will cut public services.
The Shadow Chancellor’s article sets out the key themes of Conservative fiscal policy:
The key Conservative message: "Government should share the proceeds of economic growth between the funding our public services need and the competitive lower taxes our economy demands."
Conservatives will match Labour on spending for the next three years: "I can confirm for the first time that a Conservative Government will adopt [the Government’s] spending totals. Total government spending will rise by 2 per cent a year in real terms, from £615 billion next year to £674 billion in the year 2010-11. Like Labour, we will review the final year’s total in a spending review in 2009. The result of adopting these spending totals is that under a Conservative Government there will be real increases in spending on public services, year after year."
Conservatives will be free to change spending priorities within the fixed budget: "Adopting these 2 per cent a year spending plans has implications for the manifesto that we will offer the country at the next election. It means we will not be offering unfunded spending commitments. Additional spending in one area will be matched by a spending reduction in another."
There will be no upfront, unfunded tax cuts: "Any reduction we offer in one tax will have to be matched by a tax rise elsewhere."
Taxes will be simpler and greener under the Tories: "We would focus on the crucial job of simplifying our taxes and on shifting the burden away from taxes on income and savings and towards taxes on pollution."
Over time there will be reductions in the tax burden on families and business: "What people want to know is whether you have a long-term sustainable plan to reduce the tax burden on families and on businesses – so that taxes cut one year are not then followed by tax increases a year later."
On today’s Platform, Matthew Sinclair of The TaxPayers’ Alliance argues that green taxes are unfair, undermining of economic competitiveness and inefficient.