Oliver asks for less

Oliver Letwin has laid the foundation for a Conservative victory at the next general election. We do not mean the Conservatives will necessarily win that election: that will require the recovery of great tracts of the political landscape from the Labour party. But the Conservatives are now in a position to campaign on the basis of a robust and pragmatic financial programme which is in harmony with the instincts of the British people.

When politicians are asked what they intend to do with our money, the question is generally posed in the following form: are you going to raise public spending or cut taxes? To this conundrum, the shadow Chancellor answers ‘both’. This would be mere wishful thinking, ready to be exploded in the first hostile interview, if Mr Letwin had not worked out in sober and convincing detail what he means by it, but his long-awaited speech on Monday shows that he has. He proposes to increase spending on health and education by 9 per cent in each of the first two years of a Conservative government, after which the rate of growth will be reduced to 5 per cent a year. But he also proposes, by freezing the amount spent by other departments and by cutting the cost of central government, to hold the rate of growth in public spending below the rate of growth in the economy as a whole, thereby reducing the proportion of national income spent by the government from 42 to 40 per cent and achieving savings of £35 billion by 2012. Hence the scope for tax cuts.

The figures will of course turn out to be wrong. The £35 billion is the difference between two sums of such magnitude that one can predict with absolute confidence that it will not turn out to be correct.