Conservative party says tax cut likely in second term

Sunday, 16 March 2008 12:00 AM

The Conservative party has ruled out the prospect of immediate tax cuts if it won power in the next parliamentary elections.

Writing in the Sunday Telegraph, shadow Treasury chief secretary Philip Hammond said the party would save up the funds to ensure a tax cut could be possible in its second term.

He added that such decisions could only be made looking in the long-term and that tax reductions would only be possible in a stable economy.

Mr Hammond said: "When the money's piled up in the pot, then you give it away in tax cuts. It only makes sense to look at this over an economic cycle. You can't look at it in a single year, or even necessarily in a four-year parliament."

He added that the electorate would be told that tax cuts would occur as funds had been set aside for the purpose, adding that such an approach would be "prudent and sustainable".

"We will make the savings, we will eliminate the waste and we will pile up the reserve so that at the following election, or before the following election, we are able to show people where we will make cuts," he wrote.

Conservative leader David Cameron also hinted that immediate tax reductions were unlikely when he told the party's spring forum that a "magic pot of money" would not be waiting to fund the measures.

Mr Cameron said: "There is not going to be some magic pot of money waiting for us when the next Conservative government is elected. So we need to get used to saying 'no' more often than 'yes'."

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• economy
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• economy and finance
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• taxation