19/01/05 - Conservatives Plan To Reduce Taxes

Conservatives unveil plan to reduce taxes by £4 billion
and restore stability to Britain’s public finances.

Conservative Party Leader Michael Howard and Shadow Chancellor Oliver Letwin today publish a Value for Money Action Plan which would be implemented by a future Conservative Government. 

The James Review identified savings of £35 billion in wasteful Government expenditure.  These savings will be used as follows:

• £23 billion will be ploughed back into spending on the front line.
• £8 billion of savings will be held back to start the process of restoring stability to the public finances. 
• £4 billion of savings will be used to finance tax cuts for hard-working families and hard-pressed businesses in Britain.

The plan will protect the budgets for the key public services. Spending on the NHS will rise by 21 per cent between 2005/6 and 2007/8; the budget for schools will rise by 13 per cent and transport by 10 per cent.   

We will increase spending beyond Labour’s spending plans on the police, pensions and the nation’s defences, with spending in those areas growing by 12 per cent, 12 per cent and 9 per cent between 2005/6 and 2007/8.  And we will increase spending on aid by 18 per cent - working towards 0.7 per cent of GDP in aid by 2013.

Overall, we will spend less than Labour by cutting back on wasteful spending in other areas of Government.  This has involved making tough decisions:

• 168 public bodies will disappear;
• 235,000 bureaucratic posts will go;
• the Regional Assemblies will go;
• the new Supreme Court will be scrapped;
• there will be no Small Business Service; and
• there will be no New Deal.

Michael Howard, “There is a clear choice at the next election: more waste and higher taxes under Tony Blair or value for money and lower taxes under the Conservatives.” 

Oliver Letwin, “We will spend more on what matters to the majority of people by cutting back on the rest. We will give patients a choice of a clean hospital. We will give parents a choice of a well disciplined school. We will get crime under control.  At the same time, by getting value for money we will avoid Labour’s next round of stealth tax rises and start to reduce taxes.”