1) Letwin most certainly did promise to outspend Labour. Exhibit A (pdf) is his calamitous “medium-term expenditure strategy” whereby he formally submitted his party’s intellectually surrender to Brown. He’d increase spending at a slower rate than Labour (which Brown mendaciously described as a spending cut).
2) And the effect of Letwin? A tax rise – or as the IFS put it “tax revenues as a share of national income would still be above their expected level for 2003–04.” Their dissection of Letwinomics is Exhibit B (pdf).
3) Portillo more generally – I am on a stickier wicket. He did not produce a Letwin/Brown style five-year-plan and did pledge to outspend in health and education. But he also spoke of tax cuts – by his own admission, “modest” ones. The type of thing Brown sprinkles on the end of his budget as a sweetener. I hardly think this counts as a defeated tax-cutting agenda.
4) And as for The Lady, I can do no better for an Exhibit C than quote from Chapter Three of her 1979 manifesto:
““We shall cut income tax at all levels to reward hard work, responsibility and success… It is especially important to cut the absurdly high marginal rates of tax both at the bottom and top of the income scale… Labour's extravagance and incompetence have once again imposed a heavy burden on ratepayers this year. But cutting income tax must take priority for the time being over abolition of the domestic rating system”
I write all this with a feeling of nostalgia – the tax cut debate was never one which tore the party in two. At Bournemouth 06, Cameron wanted to boldly defy tax-cutters – but he couldn’t find any and had to resort to attacking Simon Heffer, Janet Daley and Lord Tebbit because so few MPs were into this. It was never a Clause IV issue.
That was then. As the ruinous effects of Brown’s profligacy come into sharper focus, the days of copying him are over. I may come to regret saying this but I have faith in Osborne. I expect he will never again pledge to match a Labour economic plan. Nor should he. Five years plans are for socialists. Conservatives realise that the outlook changes, and new plans are required for new situations. And an ugly, new one is unfolding before us right now. Every US presidential candidate has a radical economic policy for dealing with precisely this problem – whether it’s $1000 tax cuts per working family (Obama) or cutting corporation tax from 35% to 25% (McCain). There is an alternative to Brownism. And I suspect that, pretty soon, the Tories will finally find one.