Letwin promises to finish Blair's work

Oliver Letwin has promised that David Cameron would complete Tony Blair's unfinished legacy by pushing through reforms that Gordon Brown had thwarted while Chancellor. And the party's policy director, speaking to a packed fringe meeting organised by The Independent yesterday, risked a backlash from the Tory rank and file by insisting tax cuts were not possible.

Mr Letwin mischievously praised two of Mr Blair's prominent allies – James Purnell, the Work and Pensions Secretary, and Lord Adonis, the Schools minister – and said the Tories had "exactly" the same agenda as the former prime minister.

Mr Letwin told the meeting – called What will the Conservatives do with Power? – that the two Labour ministers were laying the foundations for Tory plans to allow parents to open thousands of schools and reward firms that get the jobless off the dole.

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He said a Conservative government would use existing budgets linked to every pupil to fund its proposals for a network of 5,000 new schools without increasing overall education spending. He claimed: "Lord Adonis is privately supportive of our reforms."

Mr Letwin said the Tories would build on Labour reforms designed to get people off benefits by setting up a system of payment by results for voluntary groups and private companies that find work for the jobless. "Much of the underlying mechanism has already been infiltrated by the Blairites," Mr Letwin added. "This is what Mr Purnell would like to do. He is doing one-tenth of it. We will do ten- tenths of it. In these particular fields, by about year seven of his administration, Mr Blair and his colleagues had come roughly to the right conclusions.

"The tragedy of the Blair regime ... is that they did not do the work before they came to power to work out how they would address these things. They were trying to do it on the job."

He said: "We had the luxury of opposition and we have used it. We have been serious about developing policy.

"If we are elected – by no means a foregone conclusion – we want to have an architecture in place that is there to be implemented on day one because we know that they won't produce results until several years down the line."

Mr Letwin came under fire from representatives demanding firm pledges of tax cuts. But he said in 2006 the Shadow Cabinet agreed the UK was too highly borrowed to cut taxes.

Mr Letwin insisted all an incoming government could do was "rebalance and rearrange" the tax system. He warned: "That doesn't mean we can give unfunded tax cuts."