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The Independent reports that Labour has found an extra £5bn of savings across Whitehall.  These savings will be used to help justify next week’s promise of recession-beating tax cuts and also to blunt the Tory case that there are further big economies to be made.  In a speech yesterday evening Lord (Michael) Forsyth quoted Barack Obama’s promise to "go line by line through every item in the federal budget and eliminate programs that don’t work and make sure that those that do work, work better and cheaper.”  This is what the Conservatives now need to do, he said.

ConservativeHome’s Tuesday afternoon survey of Tory members found strong support for real terms cuts in public spending.  55% said that they supported real terms cuts in spending. 29% supported a real terms freeze.  Only 2% supported matching Labour’s planned level of spending growth and another 2% supported even higher spending.

Both main parties now appear to be in a race to get there first with announcements on tax relief, waste reduction and spending restraint.  Daniel Finkelstein – very close to George Osborne – yesterday suggesting that Labour may not keep to its own spending plans.  The clearest gap between Labour and the Conservatives is in the attitude to borrowing with Conservatives saying ‘enough is enough’ and Labour willing to take Britain further into the red.

We also asked Tory members what recession-related issues they thought would be most important at the next election.  This is the resulting league table for those members identifying an issue as "very important":

  • Unemployment: 72%
  • Personal incomes: 66%
  • Government borrowing: 62%
  • House repossessions: 58%
  • Mortgage and interest rates: 56%
  • Rising severe poverty: 38%
  • Behaviour of the banks: 36%
  • Inflation: 34%
  • The level of the pound: 27%

The Tories are calculating that – should there be an early election – government borrowing will become a much more potent issue.  Many Labour backbenchers also see political opportunity in taking a strong position on behaviour of the (nationalised) banks.

Today we launch our tracker graph of issues, their importance and which political party is most likely to ‘own’ them.  At this current time we believe that the Tory position on borrowing is our strongest issue and ‘policy activism’ is Labour’s strongest issue.  We will re-release it after next week’s PBR.  CLICK ON THE GRAPHIC TO ENLARGE IT.

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Tim Montgomerie

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