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During the campaign for the 2001 general election, Letwin, as shadow Chief Secretary to the Treasury, expressed an aspiration to curtail future public spending by fully 20 billion pounds per annum relative to the plans of the Labour government. When this proposal came under attack as regressive, Letwin found few allies among his colleagues prepared to defend it, and adopted a low profile for the remainder of the campaign. He famously went into 'hiding' during the 2001 election, and for some time after the election had finished. As Shadow Home Secretary he attracted plaudits for his advocacy of a "neighbourly society", which manifested itself in calls for street by street neighbourhood policing modelled on the philosophy of the police in New York. He was also largely credited with forcing the Home Secretary to withdraw his proposal in 2001 to introduce an offence of incitement to religious hatred. He successfully argued that such an offence would be impossible to define, so there would be little chance of prosecution. He also argued that Muslims would feel persecuted by such a law. As Shadow Chancellor he focused on reducing waste in the public sector. At the 2005 election the Conservative Party claimed to have found £35bn worth of potential savings, to be used for increased resources for front line services and for tax cuts. This approach was credited with forcing the government to introduce bureaucracy reduction and cost-cutting proposals of their own.
In May 2005, Letwin was appointed Shadow Secretary of State for the Environment, Food and Rural Affairs. It was reported that he had requested a role less onerous than his former treasury brief so that he would have time to pursue his career in the City at Rothschild's.[1] In this job his view upon the environment changed heavily. He was, before this post, relatively unconcerned about the environment, but after a few months in the job, he became radically more green buying a Lexus RX400h- an environmentally friendly car. Following the decision by Michael Howard to stand down as Conservative Party leader after the May 2005 general election, Letwin publicly backed the youngest candidate and eventual winner David Cameron, a fellow Etonian. He was subsequently given the newly created role of Chairman of the Policy Review, when Cameron formed his first shadow cabinet in December 2005. See also
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