Leading article: Mr Cameron, and the search for economic credibility

It has taken a global economic crisis, but there is finally some serious distance between our two political parties on economic policy. Until a few months ago, the Government and the official opposition were locked in a bad-tempered embrace, with the Conservatives pledged to stick to the Government's spending plans in the immediate term if they took office. Tax cuts were also ruled out by the Tory leadership team. But the economic crash has changed all that. There is now a clear difference in approach, confirmed yesterday by David Cameron's speech to the London School of Economics.

Not for the first time, the Tory leader attacked Gordon Brown's management of the public sector finances over the past decade. His criticisms were well made. If Mr Brown, as Chancellor, had run a surplus, rather than a deficit in the boom years, Britain would be much better placed going into this almighty downturn. But the problem, in political terms, is that this is an argument about the past. What really matters is the question of what the Conservatives would do differently from the Government in the present and the future.

Here is where it gets interesting. Mr Cameron is firmly opposed to Mr Brown's attempt to stimulate the economy by cutting VAT. Further, the Tories have gone back on their pledge to match Labour's spending plans after the next election. Finally, Mr Cameron says that, were his party in power, it would begin to cut public spending now in order to offset some of the spiralling public debt levels.

This certainly gives voters a clear choice. And there can be no doubt that the Government is embarking on a considerable gamble by letting the public deficit balloon in this way. There can be no guarantee that international investors will continue to want to buy up the Treasury bonds that finance government spending. Nor can there be any certainty that the hoped-for boost to public confidence from the VAT cut will be more powerful than public fears of painful tax rises scheduled for after the next election.

But Mr Cameron's approach also raises some tricky questions. Would sucking money out of the economy in the depths of a recession, by cutting spending, really be the most sensible course, no matter how much waste there is in the public sector? And then there is the question of where the spending axe would fall? So far the Conservatives have been evasive on this front. But the detail is crucial. Making efficiency savings is always easier in theory than in practice.

The Tories also need to beware the dangers of an overly parochial approach to what is, after all, a global downturn. Mr Cameron has repeatedly criticised the Government's fiscal stimulus, citing the implications for national debt levels. But will Mr Cameron mount the same criticism of the massive stimulus package expected from the Obama administration early next year in America? The Conservatives say that a fiscal stimulus is only a good idea if a country can afford it. But America has substantially greater public debt levels, in proportion to its GDP, than Britain. What is irresponsible in London is surely, irresponsible in Washington. The Conservatives need to do a better job of explaining their thinking here.

These are not mere academic questions. Recent polls have suggested that David Cameron and George Osborne are still not regarded as more competent than Mr Brown and the Chancellor, Alistair Darling, to steer Britain through this economic turmoil. Credibility is important. The Conservatives have made progress in explaining their prescription for Britain's economic woes. But they still have further to travel.