David Cameron has promised that the Conservative Party has learnt from its past economic mistakes as he announced policies aimed at restoring its battered credibility.
In his first speech on the economy since becoming Tory leader, he said: "We've learnt our lesson. We'll never again put your home, your business, your future at risk by undermining economic stability."
He said the Tories would go further than Gordon Brown's landmark decision to take control of interest rates out of the politicians' hands by transferring it to the Bank of England. He promised that a Tory government would set up an independent panel to judge Mr Brown's "golden rule'', to borrow only for investment over the economic cycle, after allegations that the Chancellor has "moved the goalposts".
The other elements of the Tories' "triple lock" on the economy's stability would be a pledge never to hand interest rate decisions to the European Central Bank by joining the single currency and giving independence to the Office for National Statistics - a move already promised by Mr Brown.
Addressing a City audience, Mr Cameron acknowledged his own involvement as a young adviser at the Treasury on "Black Wednesday" - Britain's forced exit from theexchange rate mechanism in 1992. "My party lost its reputation for economic competence," he said. "The events leading up to that day were bad for our economy, disastrous for our party, but most important of all, made life really difficult for the millions of families who faced high interest rates, negative equity and [house] repossessions ...
"No matter that the policy was backed by the CBI and by Gordon Brown and the Labour Party. That was 13 years ago. We've learned our lesson. I will never let that happen again."
Mr Cameron said Britain had fallen from 4th to 13th in the world competitiveness rankings. "But before we can tackle the long-term challenge of making Britain competitive, we must first show that people can have confidence in Conservative economic policy," he said. "Our approach will create the foundations for low inflation, low interest rates, high employment, and high and sustainable income growth." He insisted that Tories had begun the reforms which were built on by Mr Brown when he gave the Bank of England independence.
Des Browne, the Chief Secretary to the Treasury, accused the Tory leader of "singing the same old songs". He said: "Cameron is putting a new gloss on the old Tory policy of public spending cuts and economic risk."
Vince Cable, the Liberal Democrats' economic spokesman, said: "Admitting he was there on Black Wednesday is not enough for hard-working families to forget the damage the last Tory government inflicted. Cameron was the architect of the latest failed Tory manifesto. The 'triple lock' amounts to nothing more than taking on board Liberal Democrat policy.
"Mr Cameron is committed to a new fiscal rule - the so-called 'proceeds of growth rule' - which would restrict public spending to within the growth rate of the economy regardless of the economic circumstances. That rule would mean at least £12bn cut from investment this year, and at least £17bn of cuts next year to public services such as schools, hospitals, the police and the fight against crime."Reuse content