The UK's opposition Conservatives lost the last two general elections in part because they allowed Labour to portray them as taking an axe to spending on schools and hospitals. For the party to hint now that, if elected, it is ready to cut public spending plans to reduce borrowing or fund tax cuts is therefore a risky move. But it is the right one.

George Osborne, shadow chancellor of the exchequer, has no intention of having his hands tied by the government's predicament on public finance. Therefore he is revising an earlier promise to match the government's existing plans for 2.1 per cent average annual growth in departmental spending until 2010-11. His aides say he is now looking to review Labour's plans for the last year of the current spending round.

Given that Gordon Brown is unlikely to go to the polls before that date, this looks like an easy option for the shadow chancellor. Yet Mr Osborne deserves credit for facing up to one of the biggest dilemmas facing the two main parties: how to manage the UK's rapidly deteriorating budget deficit.

As it starts to feel the impact of the global credit squeeze and higher oil prices, Britain has one of the largest underlying fiscal deficits of Organisation for Economic Co-operation and Development member states. Tax receipts, already falling despite a rise in North Sea oilrevenues, will drop further as the economy slows. This will make the deficit worse. The Treasury's assumptions about what is a sustainable tax take seem certain to be over-optimistic.

If that is the case, the government will have to redraw its tax and spending plans. That could be devastating for the prime minister if, as a result, he has to raise taxes before the next election. Voters already blame Mr Brown for higher food and energy prices, a falling housing market and more expensive credit. No wonder the Treasury is considering changes to the fiscal rules he introduced as chancellor, especially if these mean it can borrow more.

Amid such uncertainty, no politician should make spending commitments beyond sustaining the most important areas. Mr Osborne has chosen a sensible economic course in protecting only health, education and international aid from cuts.

The shadow chancellor's positioning is politically smart, too. Voters are impatient with Mr Brown's public spending profligacy. There is more public appetite now for lower taxes than in 2005. After it made its own unfunded tax cuts, including a stamp duty waiver on property purchases, accusations by Labour that the Tories are acting irresponsibly will fall on deaf ears.