Liam Fox leads calls for Budget tax cuts to dismantle 'bloated' state

 

Liam Fox, the former Defence Secretary, will pile more pressure on David Cameron tomorrow by demanding a radical Budget next week that abolishes capital gains tax (GCT).

Amid growing speculation that right-wing Conservative MPs will trigger a vote of confidence in Mr Cameron's leadership, Dr Fox will  call for benefit cuts matched by tax cuts to help create a new "small state". He will call on the Conservatives to build "a society that is sustainable for the future in the way that our current - welfare dependent and debt ridden - economy is not."

In a speech to the Institute for Economic Affairs, the former Cabinet minister will say: "I would like to see CGT  reduced, if possible to zero, for a defined period before being reintroduced at a more sensible level. This would create a tax window where businesses that are sitting on assets might be encouraged to sell, investment in capital becomes more attractive and where hundreds of thousands of second homes might come on to the market."

Dr Fox will urge the Conservatives to dismantle the "bloated state" created by Labour. "We must empower people to achieve the dream of home ownership and we must stop taxing the proceeds of their savings and investments so that they can build a prosperous future for themselves," he will say.

The Prime Minister  has sought to dampen Tory hopes of tax cuts in the Budget because the Chancellor George Osborne has so little money to play with.

But Mr Cameron's critics are threatening to force a vote of confidence in his leadership of the party -which would require the backing of 46 Tory MPs-if the Budget does not restore the party's fortunes and it does badly in the May county council elections.

Theresa May, the Home Secretary, raised eyebrows at the weekend by making a speech which ranged way beyond her departmental brief. Although she insisted Mr Cameron would lead the party into the 2015 election, her address was seen as another sign that she will be a candidate to succeed him when he stands down.

Mrs May said of the Tories: "We have to become the party that is tireless in confronting vested interests, the party that takes power from the elites and gives it to the people, the party not just of those who have already made it, but the home of those who want to work hard and get on in life."

Some Tory MPs saw that as a signal that the privileged backgrounds  of Mr Cameron and Mr Osborne may be harming the party's image. Sarah Woolaston, a Tory backbencher, said the Prime Minister's inner circle looked " far too posh, male and white" and he  was running out of time to change it.

Baroness Warsi, the Foreign Office and Communities Minister, backed Mr Cameron but admitted his leadership was under discussion. She told Sky News: "He is doing a very difficult job in very difficult circumstances and he commands the support of large parts of his party. But I think Theresa [May] like me would agree that we have full confidence in the Prime Minister and fully supports him continuing to lead the party."

With weekend opinion polls suggesting the Conservatives are heading for defeat in 2015, Michael Portillo, the former Tory Cabinet minister, told Sky: "I think we have reached the stage of the Government where lots of people are thinking about who might be the next Conservative leader and in what circumstances. One is a challenge to the leadership during the course of this parliament, which I still think is pretty unlikely. The second is a Conservative defeat at the general election and the replacing of the leader thereafter, which I think is a great deal more likely."

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: ICT Infrastructure Manager

£27000 - £32000 per annum: Recruitment Genius: This Edinburgh city centre Scho...

SThree: Trainee Recruitment Consulant

£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250...

Recruitment Genius: Marketing Assistant

£17900 - £20300 per annum: Recruitment Genius: An enthusiastic Marketing Assis...

Recruitment Genius: Chef / Managers

£24000 - £25000 per annum: Recruitment Genius: This contract caterer is proud ...

Day In a Page

Mullah Omar, creator of the Taliban, is dead... for the fourth time

Mullah Omar, creator of the Taliban, is dead... again

I was once told that intelligence services declare their enemies dead to provoke them into popping up their heads and revealing their location, says Robert Fisk
Margaret Attwood on climate change: 'Time is running out for our fragile, Goldilocks planet'

Margaret Attwood on climate change

The author looks back on what she wrote about oil in 2009, and reflects on how the conversation has changed in a mere six years
New Dr Seuss manuscript discovered: What Pet Should I Get? goes on sale this week

New Dr Seuss manuscript discovered

What Pet Should I Get? goes on sale this week
Oculus Rift and the lonely cartoon hedgehog who could become the first ever virtual reality movie star

The cartoon hedgehog leading the way into a whole new reality

Virtual reality is the 'next chapter' of entertainment. Tim Walker gives it a try
Ants have unique ability to switch between individual and collective action, says study

Secrets of ants' teamwork revealed

The insects have an almost unique ability to switch between individual and collective action
Donovan interview: The singer is releasing a greatest hits album to mark his 50th year in folk

Donovan marks his 50th year in folk

The singer tells Nick Duerden about receiving death threats, why the world is 'mentally ill', and how he can write a song about anything, from ecology to crumpets
Let's Race simulator: Ultra-realistic technology recreates thrill of the Formula One circuit

Simulator recreates thrill of F1 circuit

Rory Buckeridge gets behind the wheel and explains how it works
Twitter accused of 'Facebookisation' over plans to overhaul reverse-chronological timeline

Twitter accused of 'Facebookisation'

Facebook exasperates its users by deciding which posts they can and can’t see. So why has Twitter announced plans to do the same?
Jane Birkin asks Hermès to rename bag - but what else could the fashion house call it?

Jane Birkin asks Hermès to rename bag

The star was shocked by a Peta investigation into the exotic skins trade
10 best waterproof mascaras

Whatever the weather: 10 best waterproof mascaras

We found lash-enhancing beauties that won’t budge no matter what you throw at them
Diego Costa biography: Chelsea striker's route to the top - from those who shared his journey

Diego Costa: I go to war. You come with me...

Chelsea's rampaging striker had to fight his way from a poor city in Brazil to life at the top of the Premier League. A new book speaks to those who shared his journey
Ashes 2015: England show the mettle to strike back hard in third Test

England show the mettle to strike back hard in third Test

The biggest problem facing them in Birmingham was the recovery of the zeitgeist that drained so quickly under the weight of Australian runs at Lord's, says Kevin Garside
Women's Open 2015: Charley Hull - 'I know I'm a good golfer but I'm also just a person'

Charley Hull: 'I know I'm a good golfer but I'm also just a person'

British teen keeps her feet on ground ahead of Women's Open
Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkish President Erdogan could benefit politically from the targeting of the PKK, says Patrick Cockburn
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn or a return to a Labour government

Our choice is years of Tory rule under Corbyn or a return to a Labour government

Yvette Cooper urged Labour members to 'get serious' about the next general election rather than become 'a protest movement'