Osborne woos core voters with pledge of family tax breaks

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Indy Politics

George Osborne, the shadow Chancellor, has made a direct appeal to core Tory voters by promising to rebalance the tax system in favour of the family.

The Tories could go into the next election with a pledge to offer tax breaks of £5,400 for married couples with children where one parent stays at home to look after a child, by making the child tax allowance transferable.

Senior party officials said gay couples who had entered a civil partnership would also qualify. "Life has moved on and civil partnerships are written into our law now," said one senior Tory source. "If they are in a long-term loving relationship, that is a good thing. We don't want a fight over that." However, unmarried couples and single mothers would miss out.

Mr Osborne stood firm against demands by Tory traditionalists, led by Lord Tebbit, for an explicit commitment for income tax cuts across the board, but he won a standing ovation after telling his party's annual conference in Bournemouth that he wanted to rebalance tax in favour of the family.

He confirmed a report in The Independent yesterday that the Tories would raise "green" taxes to pay for tax cuts for the family, saying: "I want to shift the tax burden from families, jobs and investment onto the pollution and carbon emissions. We will tax the bad, but not the good."

Mr Osborne's plan to help the family with tax concessions could leave the Conservatives open to criticism for penalising single mothers and unmarried couples, but it fulfils the promise made by David Cameron when he ran for the leadership to give support to married couples.

The shadow Chancellor's speech won immediate support from the Tory grassroots website, conservativehome.blogs.com, which at the weekend produced a poll of Tory activists showing 63 per cent wanted a firm pledge of tax cuts. Tim Montgomerie, a former senior Tory aide who runs the site, said the hint of tax cuts for the family, coupled with the promise of more prisons by the shadow Home Secretary, David Davis, would reassure "core Tory voters".

Rejecting fresh calls for wider tax cuts, Mr Osborne said he would not make uncosted pledges. He invoked Baroness Thatcher and Lord Howe of Aberavon, her first Chancellor, to deny the charge of the right-wing Tory old guard that he and Mr Cameron were betraying party principles.

"Let no one ever portray sound money as a betrayal of Conservative principles," he said. "We must win the argument on the economy. We will never do that if people believe our tax policy comes at the expense of their public services. That will not happen."

Warning the Tories would risk losing a fourth successive general election if they did not learn from past mistakes, he said: "We cannot any more promise the earth safe in the knowledge that we won't have to deliver it. We have to show we are serious. We cannot any more pretend that complex problems have simple answers. Above all, we have to show ... that we are responsible."

He added that Labour had been disunited last week at its conference in Manchester and he warned Tory critics: "We've been there. We've done that. We're never going back. We have to be disciplined."

Edward Leigh, the chairman of the Cornerstone Group of 40 Tory MPs, said Mr Osborne's refusal to promise more tax cuts could lead to Tory defections to UKIP, which unveiled plans for a lower, flat-rate tax for most taxpayers last night.