Letwin: Setting out spending stall

Oliver Letwin has unveiled the Tories' latest plans with a pledge to reduce the rate of growth in public spending.

The shadow chancellor has pledged that increases in public spending would slow dramatically under a future Conservative administration.

Following Labour's large increases in public spending, the Shadow Cabinet member said he intends to reduce the rate of growth in expenditure.

Letwin vowed that increases in public spending would be lower than the rate of economic growth.

This approach would give a future Conservative administration a "dividend" which could be spent on debt repayment or tax cuts, he said.

Huge savings

In his speech, Letwin suggested that the Tories can save over £30 billion a year by pursuing the policy.

"As people earn more and spend more, the government will collect more tax revenue than it did the previous year even if it leaves tax rates unchanged," he said.

"It can therefore spend more without having to put taxes up.