By politics.co.uk staff
David Cameron has insisted the Tory party and the coalition government are still for tax cuts.
And it is reported than an emergency Budget will include tax cuts for lower-paid workers.
The prime minister was criticised yesterday for agreeing to rises in capital gains tax and national insurance, which some have said were forced on him by his Liberal Democrat coalition partners.
But Mr Cameron told the Sun: "The Conservative party is still a low-tax party. Tax-cutting party - and that's in the agreement.
"Everybody knows we've got this huge deficit. Yes that involves some tax rises. But those were on the whole already put down by Labour. And the agreement says the brunt of all this has to be borne by spending cuts."
One of the early spending cuts was a five per cent pay cut for ministers, which Mr Cameron ordered at his first Cabinet meeting.
The Daily Telegraph reports that chancellor George Osborne's first budget will raise the tax-free personal allowance to more than £7,000 in his first budget.
It is estimated that this will benefit about £25 million people earning under £35,000.
Those who earn more will be hit by an increase of one per cent in national insurance, and higher-rate tax payers, who earn more than £40,000, will not receive an increased personal allowance.
As part of the coalition agreement, the government will raise the tax-free allowance to £10,000 over the next five years.