ELECTION '97 : Tories pledge standard tax rate of 20p

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The Independent Online
The "boldest and most far-reaching" Tory manifesto for two decades will today promise a pounds 1bn tax bonus for two million married couples. and commit the Conservatives to a target standard rate of income tax of 20p in the pound, as part of a programme for increasing "personal security" across Britain.

Tory strategists are hoping that their promise to continue with cuts in income tax while providing the marriage dividend and abolishing capital gains tax and inheritance tax will be seen as radical, and create "clear blue water" from Tony Blair's new Labour.

The public has grown wary of tax cutting promises, as those following Mr Major's tour to Croydon, south London, yesterday discovered. There is also abundant evidence among voters that many feel they were cheated by the increase in VAT on fuel, and the Tories appear to recognise the problem by setting the cut in the basic rate from 23p to 20p as a "target" rather than a firm pledge.

But John Major hopes that the surprise tax bonus for married couples will not only please those who are seeking a boost for "family values", but will also provide a much-needed electoral boost for the Tories with a key section of the electorate.

Under the plan, where one partner in a marriage stays at home, they will be able to divert a personal tax allowance of pounds 4,045 a year to be set against the working spouse's income.

The Tories are expected to couple their tax promises with more measures on law and order, particularly aimed at cracking down on young offenders, and the revival of the measures to impose fixed sentences for repeat offenders.

There will be a promise of a great expansion in grant-maintained schools, and more money will go direct to schools to stop education authorities withholding funds. Scrapping the 23p rate of income tax would cost about pounds 4bn, and meet a pledge first given in the 1992 election manifesto. Kenneth Clarke, the Chancellor of the Exchequer, cut 1p off the basic rate in the Budget last November, at a cost of pounds 1.25bn, which took effect from 1 April.

The Government was committed to "moving towards" a 20p basic rate of income tax, and the manifesto to be unveiled by John Major is expected to reinforce the determination to achieve it.

Labour is aiming to establish a lower rate of 10p in the pound, but a senior Tory source said: "Ours is achievable."

Tory strategists hope the document will enable Mr Major to claim that he is carrying the radical torch lit by Baroness Thatcher. It was described by Central Office sources as "the boldest and most far-reaching that any party has published for two decades".

Mr Major will claim that Lady Thatcher came to power in 1979 when the economy was a "basket case". Eighteen years later, with the economy growing, he will offer "the next stage of Conservatism". The source said: "That is a Conservatism that will give everyone - no matter who they are - more choice and more control over their lives. There is going to be a very strong theme of personal security."

That theme indicates the Tories are also seeking to counter insecurity in jobs and the welfare state, which Labour is exploiting in its campaign.

The measures to provide more security include the plans set out by Stephen Dorrell, the Secretary of State for Health, for insurance schemes for those needing long-term care when they are elderly, and the "pension plus" plan by Peter Lilley, the Secretary of State for Social Security, which the Tories claim will provide the equivalent of a state pension of pounds 175 a week by 2060.

"Our policies will be clear cut, detailed and costed. Our opponents' will be riddled with contradictions," Mr Major said.