Fox's tax holiday call puts pressure on leader

UK Political Editor

Friday 14 September 2012

THE Tory right flexed its muscles again yesterday with a call for David Cameron to introduce a three-year Capital Gains Tax holiday to "shock" the economy back to life.

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MICHAEL SETTLE UK POLITICAL EDITOR

The call from former defence secretary Liam Fox came as Nick Clegg raised the prospect of a Lib-Lab Coalition after the next General Election, saying he would be willing to enter talks with Ed Miliband.

Following on from the "man or mouse" challenge to the Prime Minister's leadership, the floating of a stalking horse bid against Mr Cameron and the formation of a new right-wing faction in Conservative Voice, Dr Fox continued the pressure from traditionalists on their party leader.Damning with faint praise he said the PM was "capable" of leading the Tories into the 2015 election.He made clear Chancellor George Osborne's deficit reduction plan was not enough to revive the economy, saying: "If we don't take some risks, we'll not get growth and if we don't get growth, we'll not get re-election."Dr Fox explained a bold decision to scrap temporarily CGT – a tax on the profit made on sales of assets, which raises £3.7 billion a year – would "ricochet round the world" and send out the message that Britain was "open for business". After three years, the tax could be reintroduced at 10% rather than its current rate of 28%."We need to shock the system," he declared.Ex-Tory defence minister Sir Gerald Howarth said: "I have yet to meet a Conservative who thinks we should be spending more money on overseas aid. My message to the Prime Minister and the Cabinet is to give defence a higher priority at the moment."Meanwhile, Mr Clegg told an audience in Cambridge, when asked if he could enter a coalition with Labour: "We will do what you, the voters, tell us to do."

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Fox's tax holiday call puts pressure on leader

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