Tories promise £30bn public spending cuts

Michael Howard will revive the old Conservative battle hymns this week by promising £30bn a year of cuts in public spending, sugared with state help for those who want to pay for their own health care or follow his example by sending their children to private schools.

His Thatcherite economic policies, to be laid out tomorrow in a definitive speech by the shadow Chancellor, Oliver Letwin, will come as a relief to Mr Howard's old allies on the Tory right, who feared that he was trimming beliefs he has held all his life.

The centrepiece of the speech will be a promise that in each year of a Conservative government, public spending will grow by one percentage point less than the expected rate of growth in the economy.

The outcome will be that, after six years, government spending will drop from 42 per cent to 40 per cent of gross domestic product.

Getting public spending below that 40 per cent figure has always been a Thatcherite mantra, because it was first achieved during her final two years in office. It then slipped back up again when John Major became Prime Minister.

Ironically, under the chancellorship of Gordon Brown, it then fell to a record low of just over 37 per cent, because Mr Brown had stuck to spending totals bequeathed by his Tory predecessor, Kenneth Clarke. It is projected to rise to 42 per cent in 2007-08.

One of the ways the Tories' reduction in public spending is to be achieved is through a freeze in all recruitment to the civil services, announced last week by Mr Howard and Mr Letwin.

But the Cabinet Office minister, Douglas Alexander, claimed yesterday that this could not be achieved without a severe impact on public services.

He said: "The Tories have confirmed that they remain wedded to huge cuts in public spending. Today's announcement would mean £30bn of spending cuts every year, and that could only mean massive cuts to vital public services like schools, hospitals and the police.

"Oliver Letwin must tell us how many doctors, nurses and teachers would be lost."

Mr Letwin will also make it clear that the Tories are sticking with two of their more controversial policies, launched under Iain Duncan Smith's leadership.

These allow for "patient passports" under which the state will make a contribution to those who save the NHS money by opting for private health care. The Conservatives are also proposing to issue "better schools passports" - vouchers worth the average cost of putting a child through state schools, which parents can spend at the school of their choice.

Both ideas will come under heavy attack from Labour, as forms of state aid to those who can afford to go private.

But a Conservative Party spokesman said yesterday: "The intention of a Conservative government will be to share the benefits of economic growth in a more balanced way between government spending and the taxpaying public, so that we have a smaller government and bigger people.

"Conservatives believe that these radical proposals will achieve far better public services and give the taxpayer much more 'bang for the buck'."