Tories Split Over Tax Cuts

by Jason Gorringe, Tax-News.com, London

04 October 2006

Despite deep divisions on the matter within the Conservative Party, Shadow Chancellor George Osborne has called for discipline and responsibility on tax policy, and warned that the Party leadership "will not be pushed or pulled" by the critics demanding a promise of up-front tax cuts now.

Delivering his first Party conference speech in the role, Mr Osborne stressed that it would be foolhardy to make specific tax pledges at this stage of the political cycle.

While he accepted the principle of lower taxes, he said it was too early to make specific promises, and warned that Conservative hopes of election victory could be wrecked if voters feared the Party was putting tax cuts ahead of economic stability of public services.

He stated:

"To those who still want us to make upfront promises of tax cuts now, we say: We will not back down. We will not be pushed or pulled. We will stick to our principles. We will do what is right."

Mr Osborne continued:

"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 is why we will share the proceeds of growth between the lower taxes this country needs and the increases in spending on public services every government should provide."

"And we will never win the argument on tax - or anything else for that matter - if people fear for one moment that we might endanger the stability of the economy, the low mortgage rates and low inflation families depend on."

Many key figures within the party, including former Conservative Chairman, Norman Tebbit have urged the leadership to nail their colours to the mast on taxation.

"If we're not very careful we're going to be the only party that doesn't believe in lower taxation," Mr Tebbit stated during a debate at the Conservative Party conference, according to Reuters. He added:

"We know tax-cutting works. We've tried it and it works."

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