David Cameron to go on attack as Labour prepares for new leader

On the eve of the announcement of the new Labour leader, David Cameron is set to launch his fiercest attack on the party since the general election, branding them "a clear threat to the security of British families".

The Prime Minister will say that he watched the contest to succeed Ed Miliband with "bewilderment" and argue that, whoever wins on Saturday, Labour is now an extreme party which has "completely vacated the intellectual playing field and no longer represents working people".

In a signal of his intention to seize some of the political centre ground previously staked out by New Labour, Mr Cameron will use a speech in Leeds to frame the Conservatives as the "progressive" party which is seeking to spread opportunity for all and increase social mobility.

And he will say that the Tory Government will pursue these goals by following the example of successful businesses, seeking new ways of doing things and delivering more for less in what he terms "a smarter state".

Mr Cameron is expected to say that the Labour leadership contest showed that the party had still failed to grasp the ideas that the national deficit needs to be cut and public services reformed.

"It's as if the financial crash, or the election for that matter, never happened," he will say.

"Whoever wins the Labour leadership tomorrow, this is now a party that has completely vacated the intellectual playing field and no longer represents working people. It is arguing at the extremes of the debate, simply wedded to more spending, more borrowing, and more taxes.

"They pose a clear threat to the financial security of every family in Britain. There's only one party that understands the big question facing our country, and one party that is developing an answer to it - and that's the modern Conservative Party."

In a move to counter the anti-austerity message of Labour frontrunner Jeremy Corbyn in the run-up to November's Spending Review - when Chancellor George Osborne is due to slash budgets across much of the public sector - Mr Cameron will argue that many of the Government reforms which have been branded "cuts" are in fact examples of using new technology and innovative thinking to "deliver more for less", as successful businesses do.

Reforms which break state monopolies and bring in new providers and new ways of doing things can "cut the cost of failure" in areas like prisons and the children's care system, in the same way that "insurgent" companies energise private sector markets, he will argue.

And he will say that Government can improve the effectiveness of spending by putting more power in the hands of local people who understand the needs of their areas, in a similar way to businesses which allow their customers to shape the way they run their services.

Just as businesses are continually seeking to "streamline" their functions, there is a "moral imperative" for Government to become more efficient, Mr Cameron will argue, citing his drive to move much official paperwork online and sell off publicly-owned offices and land for redevelopment as homes.

He will highlight as examples of the "smarter state" the expansion of the Troubled Families programme, new legislation for the integration of police, fire and ambulance operations and proposed devolution deals in 37 local areas.

"Spreading opportunity, increasing social mobility, helping people get on - these aims run through this Government like letters through a stick of rock," Mr Cameron will say.

"Central to all this is being the Government that finishes the job of turning around our economy and clearing the deficit.

"But what we are showing is that deficit reduction and an opportunity society are not alternatives. They can complement each other. Because with a smarter state, we can spend less and deliver more.

"If we make the right decisions, then far from getting in the way of our progressive goals, the changes we make can, in many cases, actually improve the services that government delivers - and help people.

"It's not unlike business. Businesses are constantly adapting and changing, using new technology or new methods of delivery, to improve both their products and reduce their costs. I'm not suggesting we should run Government exactly like a business. I just mean that if we use their insights, we can help develop a smarter state."

And he will add: "I believe that by focusing on these core principles - of reform, devolution and efficiency - we can deliver better, more progressive government that will meet the challenge of living within our means and at the same time help us to extend opportunity to all."