Cameron’s ‘bare-knuckle fight’ lacks punch

He may have warned of a 'bare-knuckle fight with the government' over the future of district general hospitals. But for all the tough talk, the Conservatives plans on taxation remain decidedly timid.

"I can promise what I've called a bare-knuckle fight with the Government over the future of district general hospitals," said David Cameron recently. Tough talk by the challenger, but the tax plan that the Tories unveiled last week has not exactly put his party on the front foot. The main thrust of the Tory's tax policy report, fronted by Thatcherite John Redwood, was to abolish inheritance tax on housing. Many have described the move as a bid to curry favour with middle England as more and more middle-class families have been hit by the tax over the last decade due to the steep run-up in housing prices.

Under the proposal, a person's main residence would be liable to a reshaped capital-gains tax, which would bring in £1.4bn to compensate for the loss of tax revenue. But as a statement of intent, it wasn't exactly earth-shattering. As Dominic Lawson notes in The Independent, the £4bn raised by inheritance tax accounts for less than 1% of the Exchequer's total annual revenues. And the Tory's proposed plans to reduce stamp duty on shares and property won't knock the wind out of Gordon Brown's sails either. Cameron will have to go much further to achieve the "low tax, low regulation, competitive enterprise economy" promised in Redwood's report.

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