Controversy is our friend, says hardline candidate...

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"We must recognise that controversy is our friend, not our enemy," he told a mixed audience of activists and undergraduates at London University yesterday. "If you stand up again and again for what you think, people begin to realise that you really mean it."

His words were an implied admission that his programme of proposed tax cuts, announced yesterday, was not a sure-fire vote winner with the general public, who still associate the Tory party with a run-down NHS and underfunded schools.

But Mr Davis is competing for the votes of 300,000 paid-up Tories who will decide who becomes the next Tory leader on 6 December - and the evidence is that they want tax cuts. He is also anxious to counter his rival David Cameron's more voter-friendly image by projecting himself as the candidate with substance.

Tory MP Andrew Mitchell, acting as Mr Davis's warm-up man yesterday, described the leadership race as "a campaign where people are beginning to realise ideas matter and experience matters" - an obvious swipe at the relatively inexperienced Mr Cameron, who is accused of lacking ideas.

Mr Davis is promising to take £38bn off the government's spending total over the course of a parliament by committing himself to making sure public spending grows at a slower rate than the economy as a whole.

Questions from the committed Tories in his audience suggested that, for them, Mr Davis's only mistake was that he was being too moderate. They appeared to want deregulation, disengagement from the EU, and reduced taxes. One pensioner, Michael Corby, from Dulwich, south-east London, thought that Davis's quiet delivery - which notoriously let him down when he addressed this month's party conference - served him well in front of a smaller audience. "He was most impressive. If only he had only given that talk at the conference."

Mr Davis denied his pledge to cut taxes was a right wing shibboleth that ran contrary to the One Nation Tory tradition he claims to represent. He argued that high tax falls hardest on people on low incomes.

But when asked who would benefit by having their taxes cut under a Davis-led government, he seemed to have in mind people in the middle rather than the poorest.

He said his first priority would be use to use the tax system to "stabilise families" through more generous allowances for married couples. He also hinted he would give private pension funds back some of the tax breaks that they have lost under Gordon Brown. Mr Davis implicitly accused every Tory party leader from John Major onwards of backing out of the fight with Labour over tax.

"The Tory party in the past decade has been too timid on tax. That's because the New Labour party has managed to persuade people that it's vital to spend more money on public services. In the last election, we did talk about tax cuts, but we didn't give ourselves time to argue the case.

"We cannot afford to be caught in the headlights of the Blair settlement. We have got to set out an alternative vision for our country. We can't do that in four weeks, but we can do it in four years. There are people who say it's particularly unwise to make these sort of commitments, that we shouldn't talk about tax at this stage in the electoral cycle - but I want this argument to start now."