The Tories need to regain their reputation for economic competence if they are ever to win back power, shadow chancellor George Osborne has said.
Mr Osborne says he's not looking for scapegoats
"Unless we come to be trusted to run the economy, we will not be trusted to run the country," he said.
In a speech to the Centre for Policy Studies, he said the party had confused "populism with popularity" in the past.
"For far too long the party has had good ideas, but lacked consistency and clarity," he said.
Mr Osborne has ruled himself out of the Conservative leadership race but is a close ally of potential candidate David Cameron.
Bank of England
Despite his harsh view of the Tory past, he said he was not looking for any "scapegoats".
"As someone involved in the Opposition since 1997, I blame myself as much as anyone else - but I've learnt my lesson."
Mr Osborne argued that while Tories had put forward the case for lower taxes, they had failed to set that in the context of a broader economic strategy.
"A taxation policy does not equal an economic policy," he said.
The party had lost credit for its past economic record by voting against Bank of England independence, he said.
While talking about reform of public services, they voted against the creation of foundation hospitals.
While putting forward arguments for a smaller state, Tories voted against tuition fees, he said.
And despite consistently opposing strikes, the party "tacitly supported the fuel protestors who brought England to a virtual stand still".
"Too often we have sacrificed long term credibility for the prospect of winning the support of an aggrieved section of the population or the possibility of winning a vote in the House of Commons," he said.
"By disagreeing with the prime minister when he attempts to do the right thing, we undermine our credibility when we criticise him for doing the wrong thing.
"Short termism has hampered attempts to develop a long term economic policy."
Mr Osborne warned that the Conservatives "still lag a long way behind the Labour Party when it comes to public confidence in our ability to manage the economy".
"Britain today desperately needs an opposition with a broad, credible, economic policy," he said.
"That policy must have one over-arching ambition: to achieve rising living standards."
The Tories should start by looking at Chancellor Gordon Brown's tax credit system, he said.
"But we should ask ourselves whether taxpayers earning incomes of say £15,000 should really be providing means-tested benefits to people earning up to £66,000 a year."
Public sector pensions is another area where the party should look to reduce future demand, he said.
"When millions of people in the private sector have seen their pensions reduced and their final salary schemes closed, how can we justify making them pay taxes to support generous, unfunded public sector pensions?
"Most people are being asked to contribute more to their pensions - is it right that many civil servants contribute 3.5% of their salary to their pensions when most people are being asked to contribute at least 6%?
"The Labour Government proposed public sector pension reform last autumn and then backtracked in the face of opposition from their public sector union paymasters.
"We should show more resolve than they do. We should look at other ways of reducing demands on the state while at the same time improving the services that the government does provide," added Mr Osborne.