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Last Updated: Wednesday, 10 December, 2003, 20:01 GMT
Letwin attacks 'borrower' Brown
Oliver Letwin
Tories claim the chancellor is taxing, spending and failing
Shadow chancellor Oliver Letwin accused Gordon Brown of being the "biggest obstacle" to reform of public services.

Mr Letwin, responding to Mr Brown's pre-Budget report, said: "You are taxing and spending and failing."

He said the chancellor's only answer to failing services was "more bureaucracy, targets, plans and taxes".

"There's very little sign that all this spending is delivering improvements on the scale that people want to see," said Mr Letwin.

'Over optimistic forecasts'

He said borrowing had risen to 37bn, despite predictions during the last election campaign that this year it would be 10bn.

The chancellor had also failed to mention in his pre-Budget statement that savings had halved.

Families were being warned not to borrow too much on their credit cards, said Mr Letwin.

"You're doing the same on the nation's credit card," he added.

The pre-Budget report showed the government was taking 50% more in tax than it was in 1997 and Mr Brown's tax revenues had not kept pace with his over optimistic forecasts, Mr Letwin said.

Bang for the buck?

The shadow chancellor has already pledged to make Britain a lower tax economy, although he has refused to make any specific tax cutting promises.

Later, in an interview with BBC News Online, Mr Letwin said his party wanted to reform public services.

"The alternative we are offering is the fundamental reform of the public services we want to get some bang for the buck."

He added: "The NHS as a whole on our model would have to compete with the private sector because we would take some parts of the cost of the operation and help people to buy private healthcare so we create competition all round within the NHS and that means you create an engine, a sustainable engine for improvement of efficiency."

'Soviet Russia'

Asked whether his suggestion would actually create more tiers of bureaucracy as administrators tried to keep track of money being moved around, Mr Letwin said that would be like saying that Soviet Russia could be richer if it adopted a market economy like in the UK.

"And you'd come back and say, 'Well that's going to be very difficult and expensive won't somebody have to run everything all the same?'.

"The NHS is being run from on top just the way that people in command socialist states used to run their economies with targets and performance monitoring and bureaucrats.

"There are more administrators than beds in the NHS today - there are all the symptoms of that kind of old fashioned command socialism."

Lost jobs

In the Commons, he accused Mr Brown of allowing bureaucracy to grow by 60% in the last seven years.

He pointed to the increased spending of 37% in the NHS which had brought only 5% more in treatment.

"The chancellor's best defence against the accusation that he has taxed and failed is that he has counter balanced this with success in monetary policy," .

Mr Letwin questioned whether Mr Brown was putting his reputation for economic prudence on the line by switching his inflation measures as part of a compromise with Tony Blair over the euro.

Despite being the longest serving chancellor since Lloyd George, Mr Brown had also lost thousands of manufacturing jobs, the shadow chancellor said.

Stealth tax

For all his talk of reform, Mr Brown was "the biggest single obstacle to reform in Whitehall", Mr Letwin added.

He told the chancellor, business was now paying in lost profitability and competitiveness from "your suffocating blanket of stealth tax and red tape".

But Mr Brown accused Mr Letwin of being "obsessed" with the borrowing figures because his aim was to cut public spending, meaning cuts to schools and hospitals.

The costs of central bureaucracy were now smaller as a share of spending than under the last Conservative government, the chancellor said.

"The Conservative Party was 18 years in government, they're going to be 18 years in opposition," he added.

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