Osborne on tax

Following William Hague’s excellent speech there last week, George Osborne has today delivered an important address on tax reform at Policy Exchange.  The key component was a cogent defence of the Tories’ current pledge to match Labour spending plans:

“Now the Labour Government have been forced by their own profligacy to adopt plans for the coming three years that halve the growth rate of government spending from 4% to 2.1%.

They too will be sharing the proceeds of growth. Not through choice but by necessity.

We do have a choice.

We can either: stick with our long term course; stick with the commitment I made to spending growth of 2.1% for the coming three years; review the final year when we know the state of the public finances; and understand that in an economic slowdown this will mean tight spending plans and difficult decisions about government priorities.

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Or we can head off onto the margins of the political debate and reduce spending growth even further for the sake of a short term argument.”