21 January 2005
A Conservative government would save £35bn on government spending by 2007/08 under the spending plans outlined by Michael Howard and Oliver Letwin this week.
The party's efficiency drive, conducted by business troubleshooter David James in response to the government's Gershon savings agenda, sets out the platform on which it will fight the next general election.
The Tories are advocating a cull of 168 quangos, including strategic health authorities, the Small Business Service and a host of regional bodies.
They also want to slash 235,000 public sector jobs, scrap the New Deal programmes and ditch the proposed supreme court. In addition, the party says it will cut the government's consultancy bill by £500m and its advertising bill by £200m.
Letwin, the shadow chancellor, said these measures would save an extra £13.5bn on top of the £21.5bn Gershon savings, which his party would also implement.
Of the £35bn saved, £23bn would be redirected into frontline services, £8bn would be used to reduce government borrowing and £4bn would fund tax cuts, Letwin said.
'David James and his team have done a brilliant job in identifying wasteful government expenditure. They have paved the way for better public services, better value for money and lower taxes,' he claimed.
The Tories have pledged to match Labour's spending on health, education, transport and international development, and spend more on pensions, the police and defence. As a result, areas such as local government, culture and agriculture will have their budgets squeezed.
The party's savings, if achieved, would reduce the £579.4bn that Labour currently plans to spend in 2007/08 to £567.4bn, or 41% of gross domestic product instead of 42%.
Party leader Michael Howard said: 'If government goes on spending more than we are earning, we will end up with higher taxes or higher interest rates or both.
'By cutting out waste, we can deliver real value, while investing in people's priorities.
PFjan2005
