Davis moots tax cuts to win hearts of Tories

Davis moots tax cuts to win hearts of Tories

	Published : Sat, 29 Oct 2005 09:05 By : Richard Owen Print this Story

LONDON: David Davis, who is running for the leadership of the Conservative Party, has proposed a 38-billion-pound cut in Britain's tax bill. He also said he proposed to cut taxes by 1,200 pounds a year for the average family, if he is elected the prime minister of the country. Davis is bidding to succeed Michael Howard as the leader of the party.

Saying the Conservatives have become too timid about taxes, he talked about a tax pledge, which would commit the party to "spend wisely, cut taxes and generate growth" if he becomes leader.

He said Britain is facing the highest tax burden for 25 years and the last time this had happened there was an economic disaster and a social disaster.

His rival, David Cameron, warned party men against making tax cuts a plank for the poll campaign.

Davis outlined his plans, which he said could result in a reduction in the basic rate of the income tax to the tune of 8 pence from the current 22 pence in the pound. This can lead to a saving for the average family of about 1,200 pounds a year by 2014/15. Alternatively, the savings can be used to cut income tax by 2 pence, reduce the main rate of corporation tax by 3 pence and scrap inheritance tax, stamp duty and capital gains tax, he proposed.

Who will win the contest will be known in December.

The shadow home secretary said it is the bottom 25 per cent of the population who pay the highest proportion of their income in tax and the biggest beneficiaries of these policy proposals will be the least well off. He dispelled doubts that such huge tax cuts would lead to huge cuts in public services. The amount spent by the state would continue to grow each year, but at a slower rate than the growth of the economy, he said.

Davis felt the Tories should adopt a "growth rule" that ensures increase in public spending by one percentage point less than the overall growth of the economy. The party can then reduce the proportion of Britain’s GDP taken in taxes from the 42 per cent he expects to inherit from Gordon Brown in 2009 to 40 per cent by 2014-15.

Cameron cautioned against outlining economic and tax policy when elections are four years away. It is not possible to know the exact state the economy will be in at that time.

Davis had finished second in a recent second round ballot of MPs. Political analysts see his tax proposals as an attempt to get some kick to his campaign and to touch the feelings of the socially conservative elements in the party.