Labour's spending plans "spell danger ahead" Michael Howard has warned, pledging to cut spending and reduce taxes by £4 billion.

The Conservative leader's comments came as the party announced details of its tax and spending plans should it win the next general election.

A Tory government would make £35 billion of efficiency savings, with a reduction in the number of quangos and back office functions as identified through the review led by company troubleshooter David James.

Of that £35 billion the biggest chunk, totalling £23 billion, would be spent on frontline services including higher health and education spending and more police officers.

A further £8 billion would be used to cut government borrowing, and "start the process of restoring stability to the public finances".

The remaining £4 billion would be used to finance tax cuts, which the party says will be aimed at  "hard-working families and hard-pressed businesses".

The tax cuts would come in a Budget to be held a month after the next election, said shadow chancellor Oliver Letwin.

Clear choice

Launching the plans on Monday, Howard said there is now a "clear choice at the next election".

He drew a contrast between "more waste and higher taxes under Tony Blair or value for money and lower taxes under the Conservatives".

"Today, it feels as if there is one rule for government and another for everyone else. People have to work hard simply to stand still," he said.

"They have to be careful with their money. They struggle to live within their means.

"But the same rules do not apply to government. Government spends at will. It is wasteful. It lives beyond its means.

"Britain cannot carry on down the path of spend, waste and tax without storing up huge problems for the economy."

Howard said he would not "accept for a moment" a situation where "people feel a growing sense of helplessness" about the power of government.

"Poor public services and ever increasing taxes are not inevitable. Britain can do better," the Tory leader added.

"We can have good local services and lower taxes. We simply have to change direction."

Forgotten majority

Pledging to protect the interests of the "forgotten majority", he added that a Conservative government would reform public services and maintain a tighter grip on public spending.

"Government has no money of its own - it all comes from the taxpayer," said Howard.

"Every single penny politicians spend comes out of the pockets of hard working families. We have an over-riding duty to give taxpayers value for their money."

Howard also said the Conservatives would deliver on its promises.

"My message to the forgotten majority is clear," he said.

"There is a clear choice at the next election, more waste and higher taxes under Mr Blair or value for money and lower taxes under the Conservatives."

Detailing the plans, shadow chancellor Oliver Letwin said: "We will spend more on what matters to the majority of people by cutting back on the rest. We will give patients a choice of a clean hospital.

"We will give parents a choice of a well disciplined school. We will get crime under control. 

"At the same time, by getting value for money we will avoid Labour's next round of stealth tax rises and start to reduce taxes."

'Fantasy economics'

Following the Conservative announcements, transport secretary Alistair Darling accused the party of failing to find the savings it needed to pay for spending commitments.

"Michael Howard has admitted that £21 billion identified by Gershon is already in his figures," said Darling.

"This is therefore massive double counting. You cannot spend money twice as this spending has already been accounted for in the government's plans.

"As a result, the Tories will still need to make massive cuts to frontline public services in order to deliver Oliver Letwin's commitment to cut public spending by £35 billion.

"The scale of the Tory cuts is such that they could only be found through frontline cuts to schools, hospitals, transport, the police and vital public services."

The Liberal Democrats said Letwin was guilty of "fantasy economics".

"These proposals are a dishonest and opportunistic attempt by a party that has realised that they have no chance of winning the next general election," said the oarty's Treasury spokesman Dr Vince Cable.

"Oliver Letwin has failed to acknowledge that tough choices need to be made in spending.

"The idea that they can increase spending on health, education, policing, international development and defence, cut taxes and correct any budget deficit by removing waste in the public sector is laughably implausible."