The figures were laid out in the Tories' pre-manifesto papers on e-government and e-commerce.
They declared they could reduce administration by 10% through online provision and bringing in e-procurement in three years.
Even modest savings, the Tories claimed, would cut prices by 7%, which would deliver an annual saving of £3.5bn. A 50% reduction in average order processing costs could yield a £2.3bn saving a year.
Shadow cabinet office minister Andrew Lansley said the Conservatives could introduce e-government more efficiently than the present government.
"Labour's approach to e-government has been characterised by increasingly bold statements and relatively poorer performance. Our approach to e-government will rest on simple, commercially proven principles. By re-engineering government service delivery and procurement around new technologies we will achieve our aims of cutting costs," he said.
The Labour Party criticised the proposals for a lack of detail. A spokesman said, "The Tories have announced no plans about how they will achieve their goals and no costings for these initiatives. Improving the quality of e-government will take time and investment. All that the Tories offer are tax cuts and less investment."
The spokesman claimed that the Opposition would freeze public sector recruitment. "This would starve government of the necessary personnel to drive e-government forward," he said.
In their e-commerce paper, the Tories promised to remove national insurance contributions (NIC) from a range of share option schemes. They pledged to increase the maximum value of options that an employee can receive without paying NIC from £30,000 to £100,000 in businesses with a value to up to £100m.
They also restated their pledge to repeal IR35, the tax rule that prevents self-employed contractors from setting up personal service companies.
Labour's spokesman warned that in January the Tories announced they would cut DTI funding for e-commerce, venture capital and university research.
He said, "They have announced a total of £300m per year in cuts to business support activities. Is this the approach of an e-commerce friendly party?"
This was first published in March 2001