Cameron faces showdown over tax cuts
David Cameron’s attempts to curb the Conservatives’ tax-cutting tendencies are about to be dealt a fatal blow by the party’s tax commission, reports suggest.
The commission, which is supposedly independent and is due to publish its findings next month, has reportedly come up with a package to cut almost £20 billion in taxes.
According to The Spectator, it will call for the basic rate of income tax to be cut from 22 per cent to 20 per cent; corporation tax to be cut from 30 per cent to 25 per cent; the basic rate of income tax scrapped; and primary homes exempted from inheritance tax.
The plans fly in the face of Mr Cameron’s instance that he would “share the proceeds of growth” between public services and tax cuts, and shadow chancellor George Osborne’s statement that the Tories are unlikely to offer tax cuts at the next general election.
The magazine states that Mr Osborne has been leaning on the commission and its chairman, Lord Forsythe, to repeal some of the plans. But even a watered-down version is likely to cause a stir and appeal to many traditional Tories.
Earlier this month the Thatcherite No Turning Back group published a pamphlet written by its chairman, John Redwood, which urged Mr Cameron to accept tax cuts, saying they were vital for economic growth.
Tory deputy chairman Bernard Jenkin, shadow home secretary David Davis and Theresa Villiers, the shadow chief secretary to the Treasury, are all members of the group.
After their new tax plans were approved at conference this week, the Liberal Democrats are now claiming to be the only party who are promising tax cuts at the next election.
In his speech to delegates in Brighton yesterday, leader Menzies Campbell said the new package, which combines redistribution with greener taxes, proved his party had credible policies – unlike the Conservatives.
“Taxation is at the heart of good government, and if a political party cannot or will not tell you how it will tax, then it does not deserve a single vote,” he said.
He added: “[Chancellor Gordon] Brown taxes by stealth.nor does Mr Cameron talk about how much he will tax or how much he will spend. All he says is that he will share the proceeds of growth, but that’s a slogan not a policy.”
However, the Tories hit back, warning that included in the small print of the Lib Dem policies was a new tax on property and tax rises in the form of a new local income tax, which the party says would replace council tax.
“The message from this year’s conference is clear: a vote for the Lib Dems is a vote for a 5p in the pound local income tax and an average two grand tax on your house on top,” said shadow paymaster general Mark Francois.
