Split deepens as Davis sides with the tax-cutters

A split in the Tory high command over taxation deepened yesterday when David Davis declared the party should not be afraid to cut taxes.

In his speech to the conference, the Shadow Deputy Prime Minister fuelled an intense debate over whether the Opposition should make an immediate promise to reduce taxes when he sided firmly with the tax-cutters. He says that the shadow Chancellor Michael Howard has been too cautious in his approach.

Iain Duncan Smith's strong commitment to lower taxes was qualified at the weekend by Mr Howard, who believes the move will have to depend on the state of the nation's finances.

Mr Davis, who would almost certainly run for the Tory leadership if Mr Duncan Smith is ousted, told the conference: "Conservatives are not afraid to say that the way we've organised public services for 60 years is fundamentally flawed. We're not afraid to say that if we want to give people genuine choice and opportunity, we have to tax them less and set them free."

Other shadow ministers believe that promising tax cuts will undermine the Tories' attempt to win the voters' trust on public services - a view shared by Kenneth Clarke, the former Chancellor.

Andrew Lansley, a former Shadow Cabinet minister, told a Blackpool fringe meeting yesterday: "We have to be very careful about where we go to in terms of making promises about cutting taxes until we know precisely where the money will come from in order to fund those reductions in taxation."

Mr Lansley said he believed the Tories should be prepared to maintain the increases in health spending planned by Labour. But if the party promised tax cuts, he warned, it might have to reduce spending on health or areas such as education, transport and crime.

Mr Davis said Labour had implemented no fewer than 60 tax rises since 1997. Following anger about this year's record increase in council tax bills, he announced a major review of local government finance. He promised the Tories would "give councils the freedom to spend money to meet their constituents' needs, not Whitehall's demands".

He set out his personal "Conservative vision of society" which highlighted his own upbringing on a south London council estate. He said he was drawn into politics by Winston Churchill's description of a Britain in which "there is a limit beneath which no man may fall, but no limit to which any man might rise".

He said: "His vision can be summed up in two images - a ladder and a net. A net below which no one should be allowed to fall. A ladder which gives everyone the opportunity to climb to the top. That's the society I want to see - the opportunity society."

As an example, Mr Davis cited the Thatcher Government's decision to allow council tenants to buy their homes. He promised the Tories would restore the right-to-buy by reversing Labour's plans to restrict it, which he said was based on the "politics of envy".

He said the party must set out a "positive alternative" to Labour and "a vision for the country we want to see".

Mr Davis, who is leading the Tories' drive to decentralise power, said: "We'll make services accountable but the professionals will be in charge. Teachers will run the schools, not Charles Clarke. Local people will control the police, not David Blunkett."

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