Cameron promises to tackle causes of rising public spending

David Cameron will promise a squeeze on public spending if the Tories win the next election to allow them to deliver tax cuts.

The Tory leader has consistently refused to offer immediate tax cuts, a move which has angered his party's traditionalists. But in a speech in Birmingham today, he will outline how his party would "square the circle" so it could safeguard priority areas of spending and reduce taxes.

Mr Cameron will acknowledge that Britain will face pressure to spend more on "essentials" such as care for the elderly, equipment for the armed forces, on prisons and on the police. "With the rising cost of living, taxpayers can't take any more pain, and the economy can't take any more pain without losing jobs to lower tax competitors," he will say. "We have reached the limits of acceptable taxation and borrowing."

Promising that Britain would "start living within our means", he will say that a Tory government would tackle three causes of rising public spending – social failure such as family breakdown, unemployment, drug and alcohol addiction; top-down state monopolies; and bureaucracy. The Tory strategy will mean "not spending everything we have; not borrowing to spend more than we have, but bringing spending down as a share of national income so that over time, the economy grows faster than the state and we can reduce taxes and borrowing."

In a speech today, Gordon Brown will promise to ensure Britain remains "the investment and cultural destination of choice for the creative industries and the technological businesses of the world". He will tell the Google Zeitgeist Conference in London that new technology will play a major role in improving public services. He will cite crime mapping to back up neighbourhood policing; electronic school report cards to raise standards; allowing people to access their child's school records or book hospital appointments at the touch of a button; and video-identification dramatically speeding up identification of suspects.

"Across government and the public services we must present and distribute the information we hold in a way that enables it to be re-used by online communities, potentially reaching many millions more people and helping make Britain a country of technology pioneers," he will say.