Tories vow to match Labour spending

Mr Osborne said the 2% increases in the financial years 2008/9 to 2010/11 would also allow "sustainably lower taxes" as the economy is expected to grow faster than public spending.

The shadow chancellor says in a newspaper article: "I can confirm for the first time that a Conservative government will adopt these spending totals."

He continued: "Total government spending will rise by 2% a year real terms, from £615 billion next year to £674 billion in the year 2010/11. Like Labour, we will review the final year's total in a spending review in 2009.

"The result of adopting these spending totals is that under a Conservative government there will be real increases in spending on public services, year after year.

"The charge from our opponents that we will cut services becomes transparently false."

He added: "At the same time the share of national income taken by the state will start to fall, as the economy grows faster than the government does. Pursuing this approach over an economic cycle creates the headroom for sustainably lower taxes."

Tory aides billed the pledge as a major announcment from the shadow chancellor, who promised his party would not offer unfunded spending commitments at the next election.

He also insisted in his Times article: "There will also be no election promises of up-front, unfunded tax cuts. Any reduction we offer in one tax will have to be matched by a tax rise elsewhere."

But Chancellor Alistair Darling hit back in a statement saying: "In recent weeks the Conservatives have been proposing tax cuts amounting to £21 billion. Now they claim they can match Labour on public spending. They can't and their sums don't add up."