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Wednesday, June 29, 2005
Tory tax debate

Tax has taken centre stage in the Conservative Party leadership election today as David Cameron makes the case for restoring the married couples allowance a key policy in the(unofficial) launch of his leadership bid.

Ahead of his Policy Exchange lecture, David Cameron told the Daily Telegraph that he would like to reintroduce a tax break for marriage. "You can't bribe people to get married but the Government ought to ask the question: Are we making it easier for people to stay together or more difficult?" This would be a welcome development in Conservative Party policy. More worrying, however, are his views on the level of taxation.

Tax cuts should, he believes, be a long term aspiration rather than an immediate priority. "I would hope that any Conservative government at the end of its time in power will have reduced taxes but if the first thing the Conservative government has to say is tax cuts and the smaller state then we haven't 'got it'. If we're all in it together then we have to have well-funded public services."

Alongside David Cameron's interview was a report on Shadow Chancellor George Osborne's research visit to Estonia which appears to put him at odds with his political soul mate. George Osborne called for the Conservatives to "make a bold case for lower and simpler taxes". Like David Cameron, Michael Howard said earlier this week that tax cuts were not "a silver bullet" and that public services should come first.

George Osborne said to the Daily Telegraph: "I am not disagreeing with Michael Howard; tax cuts are not a silver bullet. But we ought to make the case for lower and simpler taxes right at the beginning of the parliament, and it needs to be part of a broader economic strategy. I don't think we can just come up with a few tax cuts three weeks before the election."