New Tory Government Would Cut UK Taxes Within Weeks

by Robert Lee, Tax-News.com, London

14 December 2004

In an interview published by the Daily Telegraph at the weekend, Shadow Chancellor Oliver Letwin gave his clearest indication yet that he would cut taxation early on in a new Tory administration, and gave a “cast iron” guarantee that the tax burden would be eased for low and middle income workers.

Until now, Letwin has been coy about making specific promises on taxation for fear of being unable to keep them when in office, but as the election approaches, the Conservatives appear keen to establish clear battle lines with the governing Labour Party on the issue of taxation.

"We will make commitments about tax before the next election," Mr Letwin told the Telegraph.

"They will be cast iron because they will be about what we do a month after the election in our first Budget and I will resign if we do not do them," he declared.

At the centre of Conservative policy for the next election, widely expected to be held in May 2005, are pledges to ease the tax burden on the lowest paid by increasing tax-free allowances, and on the middle class by increasing the threshold at which the 40% top rate of tax becomes payable, to £40,800 from the current £36,145.

Letwin has also earmarked inheritance tax, stamp duty and local taxation as high Tory priorities if returned to office, although he intends to remain vague on any specific plans for these taxes until the state of the government's finances are known, after the 2005 budget announcement in March.

Nevertheless, he told the Telegraph that he is keen to set the right tone in his first few days at Number 11, should the Tories succeed in displacing Labour.

"We will be in a position to make some specific moves,” Letwin noted.

“They will not be enormous…they will not be grand - they will be measured. They will indicate a direction. They will not be airy fairy," he pledged.

Recommended