Philip Hammond, Shadow Chief Secretary to the Treasury and MP for Runnymede and Weybridge, highlights the key themes of yesterday's 'Living within our means' speech by the Conservative leader.
David Cameron gave an important speech yesterday setting out how the Conservatives will make sure that we live within our means in Government. After a decade of reckless spending under Labour, David’s pledge to restore “good housekeeping” is a key part of constructing a positive alternative to this failing Government.
In the decades ahead there will be pressure to spend more on the essentials - whether that’s care for the older generation, equipment for our armed forces, or more prisons and police. And at the same time, we have reached the limits of acceptable taxation and borrowing.
With the rising cost of living, taxpayers can’t take any more pain; indeed they want a Government that can give them the prospect of relief. And our economy can’t take any more pain without losing jobs to lower tax competitors.
Our overall method and aim are clear: we will share the proceeds of economic growth. Sharing the proceeds of economic growth will ensure that we live within our means. Not spending everything we have. Not borrowing to spend beyond our means. But ensuring that, over time, the state grows more slowly than the economy as a whole, so spending falls as a share of national income and we can reduce taxes and borrowing.
A Government committed to sharing the proceeds of growth is, by definition, a Government committed to the reduction of taxes, or of borrowing, or both - over the economic cycle.
So how will we deliver this commitment? By attacking the three principle causes of rising public spending at source.