George Osborne: There is nothing progressive about out-of-control spending

By pursuing a course of illiberalism, centralisation, fiscal incontinence and opposition to meaningful public service reform, the current leadership of the Labour Party has abandoned the field of progressive politics.

In its place, the modern Conservative Party is now the dominant progressive force in British politics. Whether it is pioneering open primaries to select our parliamentary candidates, or using new technology to give the public power through access to government information, or our commitment to a radical localisation of power, we are the ones setting the pace in politics.

Some now say that the economic problems facing the country, and in particular the ballooning budget deficit, mean that the Conservative Party must put our interest in public service reform, localism and environmental improvement on the back burner. They say that the progressive priorities that motivated the Conservative Party in the first couple of years of David Cameron's leadership are luxuries that cannot be afforded in an age of austerity. I couldn't disagree more strongly.

Indeed, I would argue that our commitment to fiscal responsibility in the face of mounting national debt is not at odds with progressive politics, but fundamentally aligned to it – as politicians on the left from Bill Clinton to former Canadian prime minister Jean Chrétien once understood. There is nothing progressive about out-of-control spending that the poorest end up having to pay for, and nothing fair about huge national debts that future generations are left having to pay for. And it is that fiscal responsibility allied to a passionate belief in public service reform, particularly in education, which is the only progressive route out of this debt crisis.

We face a choice between progressive reform with the Conservatives and front line cuts under Labour. Without fundamentally improving the productivity of public services, the quality of those services will deteriorate as budgets are squeezed. Since the current Labour Prime Minister has made himself a roadblock to reform, and refuses even to acknowledge the budget constraints, the only path he offers is one that will lead to deep cuts in front-line services. The alternative is the progressive one – and the Conservative one.

This is an extract from a speech given by the Shadow Chancellor to the think tank Demos in London yesterday