Cameron defies activists by dashing hopes of tax cuts

(MARK PINDER/PA)

Tory leaders risked a confrontation with grassroots activists as they warned they might not be able to offer tax cuts until they had won two general elections.

They moved to dampen expectations of early reductions in taxation as two opinion polls suggested the party had built an emphatic lead over Labour after last week's Budget.

The party said it would spend its first four years in office focusing on reducing borrowing through efficiency savings.

Philip Hammond, the shadow Chief Secretary to the Treasury, said tax cuts would be the "great bonus" of a second election victory. "When the money's piled up in the pot, then you give it away in tax cuts," he told The Sunday Telegraph. "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."

David Cameron also warned yesterday that families might not have more money in their pockets under an incoming Tory government. "We have to recognise, as an Opposition, that if we win the next election, it will be tough, and there will not be some large kitty of money to spend," the Tory leader told BBC1's Politics Show. "We will have to say 'no' a lot, as well as, hopefully, being able to say 'yes' to some of the things we want to do.

"I cannot sit here and promise we're going to cut the cost of living and make everything easier for Britain's families. But what we can do is say we will stop making it worse."

The leadership stance flies in the face of activists' calls for tax cuts. One recent survey found that three-quarters of Tory members favoured tax reductions paid for by "tougher spending controls".

Labour claimed that Tory economic policy was in disarray as the shadow Chancellor George Osborne had called just last week for tax cuts for families. Yvette Cooper, Chief Secretary to the Treasury, said: "How can they deliver stability in the economy if they can't deliver stability in their own policy?"

But Tory morale was boosted by two polls yesterday showing a significant leap in their support. A YouGov survey for The Sunday Times put them on 43 per cent, 16 points ahead of Labour, which recorded a 25-year low of 27 per cent. The Liberal Democrats were on 16 per cent.

ICM for the News of the World put the Tories up three points on 40 per cent, with Labour down three at 31 per cent and the Liberal Democrats on 20 per cent.

Both surveys also showed that the public had more faith in Mr Cameron and Mr Osborne to run the economy than Gordon Brown and the Chancellor Alistair Darling.

The Tories will today announce plans to enforce a greater sense of corporate responsibility, starting with tackling waste.

Archie Norman, the former Conservative shadow environment secretary and chief executive and chairman of Asda, will take charge of plans to draw up "responsibility deals" under which manufacturers promise to reduce all types of waste.

Peter Ainsworth, the Conservatives' environment spokesman, said: "We throw too much away, wasting precious natural resources as well as money. To tackle this we need to be smarter about what we produce in the first place. A responsibility deal on waste would aim to engage the skills and knowledge of businesses, consumers and the public sector in finding creative, effective and non-bureaucratic ways to make Britain greener as well as better off."