The Telegraph reports that the Tory leadership has been discussing an "elegant retreat" from its policy of matching Labour on spending: "The Tory leader, under mounting internal pressure to stretch his party’s lead over Labour, has conceded that it could be impossible to deliver tax cuts if he sticks to Gordon Brown’s commitments."  The newspaper reports the overwhelming opposition of party activists to the pledge, as recorded by this website.

If true the news would be a rapid victory for ConservativeHome’s campaign for a more flexible approach to public spending.  We’ve not campaigned for an abandonment of the pledge to match Labour’s spending until 2010/11 – only for the pledge not to be renewed.

There are three central weaknesses to the pledge:

  • Labour has presided over the largest peacetime increase in the size of the British state.  Conservatives should be putting an end to the spending binge.
  • It tied Tory hands for far too long. We need the flexibility in government to adjust spending plans if economic circumstances demand it.
  • It left no room for reductions in borrowing or taxation.  On last week’s Platform the Tory Treasury team’s Philip Hammond defended the pledge.  Mr Hammond said that a period of economic certainty would be the wrong time to cut the growth of public spending.  We have some sympathy for the view that a fiscal tightening would be dangerous in a recession but economy-boosting tax relief would be preferable to still higher public spending.

4pm: Red Box reminds us of what Cameron and Osborne have said about the spending pledge.