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Howard: The Conservative Value for Money Action Plan

Speech at the Institute of Directors

"Britain is a great country. But today we are heading in the wrong direction. If we are to make the most of our potential, Britain must change track.

Mr Blair may labour under the illusion that Britain is working, but people have a deep sense of unease about how our country is governed. They realise that the balance in our society is increasingly tilted in favour of government at the expense of people.

When that happens, it damages economic performance and the ability of the economy to create jobs and increase living standards. When government become the biggest growth industry in town, you can be sure that the rest of the economy is heading for trouble.

Our Civil Service is now the size of Sheffield. Unaccountable quangos and regional assemblies scatter Britain. Regulations, instructions and initiatives rain down from Whitehall.

Today, it feels as if there is one rule for government and another for everyone else. People have to work hard simply to stand still. They have to be careful with their money. They struggle to live within their means.

But the same rules do not apply to government. Government spends at will. It is wasteful. It lives beyond its means.

Britain cannot carry on down the path of spend, waste and tax without storing up huge problems for the economy.

As government has got bigger and more centralised, people feel a growing sense of helplessness. They have come to believe that the problems we face are like the British weather - something you complain about but are powerless to change.

I don't accept that for a moment. Poor public services and ever increasing taxes are not inevitable. Britain can do better. We can have good local services and lower taxes. We simply have to change direction.

Britain needs a government with the right values: trusting free enterprise; promoting individual responsibility; cherishing a sense of nationhood; rewarding hard work; admiring excellence; encouraging ambition - these are the right values. They are Conservative values. And they are the values of the forgotten majority - the backbone of our country.

They have been forgotten, neglected and taken for granted by Mr Blair. He asked them to trust him and many did. But he's let them down. All he wants from them is their votes at election time and their cash once the votes have been counted.

The forgotten majority work hard. They save to buy their first home. They put money aside for their retirement. They take responsibility for their families. They deserve to be rewarded. But for the last seven and a half years their only reward has been to see their taxes rise by stealth, up 66 times.

The solutions to the problems Britain faces may not be easy - but we know what they are. Conservatives understand what needs to be done.

First, we must reform our public services so that taxpayers get value for their money. Conservatives will give choice to parents and patients. Choice drives up standards in every field of human endeavour. It is monopoly run by bureaucrats that is their enemy. And Conservatives will give power to local professionals - teachers, doctors and nurses. They know better than bureaucrats in Whitehall how to provide good local services.

Reform is not an end in itself. It is a means to an end. And that end is better services for people: cleaner hospitals, school discipline.

Second, we need to get a grip on public spending. Mr Blair's spending plans spell danger ahead. Government's which let public spending grow faster than the economy as a whole, eventually destroy their economic performance.

If government goes on spending more than we are earning, we will end up with higher taxes or higher interest rates or both. That would mean more pain for the forgotten majority. Mr Blair is taking a huge gamble with the economy and Britain's future economic prosperity.

And today we've heard that, like Mr Blair, the Liberal Democrats would also raise taxes to pay for their spending spree.

Britain is already the slowest growing of the English-speaking economies. Since 1997, the British economy has grown more slowly than Canada, America, Australia and New Zealand. Ireland's income per head is now higher than Britain's.

All these economies have lower spending and lower taxes than Britain. Their reward for controlling spending and cutting taxes is faster growth. Higher growth means higher living standards. It means government can spend more on people's priorities. To secure our future economic prosperity, government must once again start to live within its means.

Government has no money of its own - it all comes from the taxpayer. Every single penny politicians spend comes out of the pockets of hard working families. We have an over riding duty to give taxpayers value for their money. By cutting out waste we can deliver real value, while investing in people's priorities - more police, schools, healthcare, our armed forces. But the most effective way of stopping wasteful government spending is for those who actually earned the money to keep it. If government doesn't get its hand on your money, it can't waste it.

So, third, we need lower taxes. Low tax economies are the most successful economies. But when people pay less tax you also have a more cohesive society because we do more not just for ourselves, but for our communities.

By cutting government down to size we can ensure that the forgotten majority keep more of the money they work so hard to earn. Most people spend more money on taxes than they spend on food, clothing or their homes. In too many families, one parent is working to put food on the table, while the other is working to pay for government. It is not fair. It's bad for the British economy. It has to stop.

And under the Conservatives it will.

Last year we announced our future spending plans. They will enable a Conservative government to: deliver value for money; stop Mr Blair's next round of stealth taxes; and lower taxes.

Since then an independent team of experts has reviewed every area of government activity. Today Oliver Letwin is announcing its conclusions. It shows exactly how we will deliver lower taxes and better value for money. No-one has to take us on trust. What we promise we will deliver. Our proposals are reasonable, responsible and achievable.

My message to the forgotten majority is clear. There is a clear choice at the next election: more waste and higher taxes under Mr Blair OR value for money and lower taxes under the Conservatives."

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