Tories abandon tax cuts in favour of public services

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The Conservative Party is ready to abandon its long-standing commitment to tax cuts in an attempt to win the voters' trust on public services.

The significant change of strategy was revealed yesterday by Oliver Letwin, the shadow Home Secretary, who sparked a controversy during this year's general election by suggesting the Tories' planned £20bn of tax cuts by the end of this Parliament.

In an interview withThe Independent, Mr Letwin said that the Tories would not even consider introducing tax cuts until they had worked out new policies for services such as health and education.

Asked if the party might enter the next election without a tax-cuts pledge, he said: "That may very well turn out to be the position. It has to be driven the other way round – by public services."

Mr Letwin said that his long-term goal to reduce the share of national income taken by the state to 35 per cent – a view shared by the Tory leader, Iain Duncan Smith – "might turn out to be 100 years away". He said: "The need for a first-class health service cannot be postponed. We need it as soon as possible." He denied the Tories had put tax cuts before public services at the last general election, but admitted: "It is certainly the way we let it be seen, and we have learnt from our errors."

Mr Letwin, who was promoted to the senior post of shadow Home Secretary despite the dispute over tax cuts, hoped the Tories would keep discussion of Europe to the minimum at their annual conference in Blackpool, which opens today. "It is a temptation we should resist," he said. "We have to establish our credentials in other areas. We need to talk seriously about the public services and the present crisis [over terrorism]."

He said: "Our task in the next four years is to persuade the public that we are a group of people to whom it would be sensible to entrust the government of this country." He wants his party to speak with a new tone, even after the resumption of normal political hostilities, now suspended because of the terrorist attacks in America.

"[We] need to establish its credentials as a liberal, tolerant, humane, compassionate, sensible and honest party, not people just engaged in a game of party politics."

Mr Letwin is in the front line of the bipartisan approach to the present crisis. He said he was adopting a policy of "constructive engagement", as he seeks to reach agreement on an urgent package of anti-terrorist measures with David Blunkett, the Home Secretary.

He acknowledged that it would be difficult for Labour and the Tories to balance the needs of security with civil liberties. His approach would mean "not passive acceptance of everything that comes forward but not party political bickering either".

So far, relations with Mr Blunkett, with whom he held constructive talks on Friday, are friendly. But the hard part will come when the Government produces its emergency Bill.

Mr Letwin does not believe that the Human Rights Act should be repealed, but thinks it will need some careful "pinhole surgery". He believes identity cards have little to offer in the crisis, since they would take years to introduce.

The attacks in the US have overshadowed the conference season and will make it hard for the Tories to use this week's truncated two-day event as a launch pad for their new leader. Mr Letwin had intended to go on the attack over crime, and is compiling a raft of statistics on how it has increased since 1956, the year in which he was born. But his campaign has fallen victim to the unofficial truce since 11 September.

But Mr Letwin insisted the Tories would not feel inhibited about criticising Labour's "failure" to improve public services, and is convinced the Opposition has a real opportunity to sketch out its own radical new reform agenda.

Mr Letwin is reviewing the party's stance on three sensitive issues – asylum, drugs and Section 28. There is speculation in Tory circles that, as a libertarian, he may outflank Labour by calling for the decriminalising of cannabis. For the time being, he is being coy about his ideas. "I have seen myself described as a hard-nosed authoritarian and an ultra-libertarian. I have always seen myself in the Conservative tradition that defends a liberal society."

Labels are dangerous in today's Conservative Party. Once a protégé of Sir Keith Joseph, Mr Letwin believes Baroness Thatcher was wrong to criticise Muslim leaders for their response to the terrorist acts. "I disagree with her," he said. "They were categorical in their condemnation of terrorism of any kind."

Agenda

Today: Iain Duncan Smith opens conference by introducing Shadow Cabinet. Speech by chairman, David Davis. Debate on terrorism, foreign affairs and defence, led by deputy leader, Michael Ancram. Local government debate.

Ann Widdecombe, Damian Green and Alan Duncan speak at The Independent's fringe meeting on "Why I am a Conservative", 6.15pm, at Renaissance Room, Winter Gardens.

Tomorrow: Debates on women, welfare, education, health, industry, and the countryside.

Wednesday: Speech by David Trimble, Ulster Unionist Party leader. Debate on Northern Ireland. Debate on rule of law. Keynote speech by Mr Duncan Smith.