She tried to do it and failed – can Cameron cut public spending?

DAVID Cameron has ventured into territory that even Margaret Thatcher could not deliver on: cutting public expenditure.

While the Tory leader has pledged to safeguard spending on "essential services" if he becomes prime minister, he gave a strong signal yesterday that he would reduce waste, and possibly cut taxes.

But critics lambasted him for being strong on rhetoric but light on detail – such as where the savings would come from.

In a speech to supporters in Birmingham, Mr Cameron revived Mrs Thatcher's ideology, insisting the country needed to learn to live within its means.

He accused Gordon Brown of presiding over massive waste and echoed Mrs Thatcher when he said it was time for some Tory "housekeeping".

On entering No10, Mrs Thatcher said "any woman who understands the problems of running a home will be able to understand the problems of running a country".

Mr Cameron, who worked for Mrs Thatcher's government for its final two years, described the Conservatives' overriding mission as "to revive our society, just as Margaret Thatcher revived our economy; to reverse Britain's social breakdown, just as she reversed our economic breakdown. And we have set out how we will achieve that mission – by ending the era of top-down state control and big government".

He said people were angry with Labour, as they saw their taxes going up but could see no tangible improvement in the quality of their lives.

"After a decade of reckless spending under Labour, Britain needs good housekeeping from the Conservatives. We need to start living within our means," he said.

The Conservatives would still "spend more on essentials" while, over time, "creating the space for cutting tax", he said.

"Our overall method and aim are clear: we will share the proceeds of economic growth. Sharing the proceeds of economic growth is what living within our means actually means. Not spending everything we have. Not borrowing to spend beyond our means. But ensuring that, over time, the economy grows faster than the state, so spending falls as a share of national income and we can reduce taxes and borrowing."

The Tory leader said this would be done by attacking the three causes of a bigger state and rising public expenditure. These were family breakdown, unreformed public services and the cost of bureaucracy itself.

Mr Cameron outlined what he said were some of Labour's most wasteful projects – a £20 billion NHS computer that was still not working properly, £2.3 billion spent refurbishing the offices of Ministry of Defence civil servants and nearly £2 billion lost in tax credits due to fraud in just one year.

A Conservative government would have the principle of "long-term tax reduction". Low taxes were "morally right and economically efficient", he said.

Mr Cameron stopped short of outlining exactly where he would make the savings.

He announced that he would scrap the recommendations of the James Review, which was appointed at the last general election. This set out a long list of all the government functions and quangos the Tories would cut.

Before coming into power at Holyrood in May last year, the SNP also set out plans to have a "bonfire of quangos", but this has so far failed to materialise.

Mr Cameron admitted that the overall approach of his party's review had not been credible.

"People didn't believe it, for the very good reason that controlling public spending is not about a one-off efficiency drive, it's about a whole new culture of government," he said.

Yvette Cooper MP, the Chief Secretary to the Treasury, dismissed the Tory leader's claims and accused him of lacking substance.

"Yet again David Cameron's rhetoric fails to stand up to scrutiny," she said. "He may urge spending discipline today, but that hasn't stopped him and his shadow cabinet colleagues from making numerous spending commitments with no explanation as to where the money is coming from."

Vince Cable, the Liberal Democrats' economics spokesman, said the Cameron speech showed the Tories were not yet fit to govern.

"You cannot simply claim you will make government more efficient and improve public services without offering any concrete solutions for how you will do it," he said. "This hotchpotch of vacuous platitudes merely confirms how hopelessly ill-prepared the Conservative party is for power."

CAUTIOUS MOVES ON TAX CUTS

WHEN David Cameron came to power two-and-a-half years ago, he resisted calls from Tory traditionalists to pledge tax cuts and a reduction in public spending.

He instead focused on modernising the party by playing up its commitment to the environment and social mobility.

Buoyed by the Tories' recent triumph at council elections in England and Wales – and seizing the London mayoralty from Labour – Mr Cameron has now been emboldened to set out what the Conservatives stand for.

While insisting that tax cuts and prudent spending were part of his party's "DNA", Mr Cameron's promises yesterday were still cautious. Indeed, he has dispensed with the Tories' James Review, published before the 2005 election, which outlined which services and public bodies would be cut.

Mr Cameron has instead pledged to share the "proceeds of growth" between tax cuts and spending on "essential" services.