Conservative Leadership Candidate Reopens Tax Debate

by Jason Gorringe, Tax-News.com, London

04 September 2001

One of the two remaining runners in the race for the Tory leadership in the United Kingdom, Iain Duncan Smith, has reopened the can of worms which arguably led to the downfall of the previous incumbent, Willian Hague, during the recent election campaign.

Speaking on BBC television, Mr Duncan Smith held out the prospect of large tax cuts under a future Conservative government, echoing the remarks made during the election campaign by Oliver Letwin, shadow chief secretary to the Treasury, who speculated that a Tory government would cut spending by as much as £20 billion over five years.

Mr Duncan Smith said that although he envisioned a spending figure of around 35% of national income, 5% below Labour's proposed figure, this was only 'an aspiration'. 'Every successful nation tends to be a lower-tax, lower-spend nation,' he said on breakfast television at the weekend. 'The balance must be that the state does have to do something, but there are limits to the good it can do.'

It is thought that the possibly ill-advised reopening of the tax debate is intended to put some distance between Mr Duncan Smith and his rival for the Tory party leadership, Kenneth Clarke, as Mr Clarke has publicly stated that he believes that public spending should remain at current levels. Supporters of Mr Clarke have been quick to condemn the proposals of his rival as 'electoral suicide'.

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