Cameron's press conference

Many columnists are suggesting that this will see a U-turn on sticking to Labour's spending plans...

And it has. In a particularly effective speech, David Cameron has given a comprehensive account of where he thinks the economy is. He has abandoned the pledge to match Labour's spending plans in 2010-2011 and onwards saying that, "I can announce today that we set a new path for restraining the growth of spending from 2010-2011... public spending growth of 2% looked sustainable in the boom, after 2010-2011 looks unsustainably high."

This will please the punk tax cutters who will see it as a clear sign that there will be scope for future spending cuts. Cameron reminded everyone, that he has already asked the Shadow Cabinet to look at all spending pledges and programmes to ensure that they are all desirable and necessary.

But this was a wide ranging speech in which Cameron attacked the £30bn "borrowing bomb shell" that Gordon Brown is planning, saying that it will lead to a "£30bn tax bomb shell - or an 8% rise in income tax or a 6% rise in VAT."

He pointed out that there is little evidence that the fiscal stimulus plan will work, pointing to Japan which had tried to push through an unfunded fiscal stimulus in the 90s. Japan's net debt rose by 50% of GDP, but the economy grew only by 1% per year.

Cameron maintained his plans for the 'sharing the proceeds of growth' saying that over an economic cycle, there would be growth to share, by ensuring public spending grew at a level less than that of the economy as a whole.

In the questions afterwards, he was particularly keen to emphasise Gordon Brown's 'lies' over the economy and stated that he believed 'no one believes the Labour lies over Conservative spending cuts anymore'.


I think that this a clear and much needed change in direction for the Conservative party. Although they have not gone as far as I would have liked, in terms of identifying public spending to cut now, in order to support tax cuts, I do think that Cameron has set out the case eloquently, and is by far, his most effective performance on the economy for some time.

There may be some risks in abandoning Labour's spending plans for 2010-2011 - it leaves the Tories open to Brown's charges of 'Tory cuts' - but I really think that the public are feeling taxed to the hilt, and are willing to listen now more than they were in previous elections.