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Last Updated: Tuesday, 27 November 2007, 13:17 GMT
Cameron attacks tax increase plan
David Cameron
The Conservative leader pledges to fight the capital gains tax plans
David Cameron has vowed to fight plans to raise capital gains tax (CGT) and called for a simpler tax regime.

Speaking at the CBI conference, the Conservative party leader said he would fight plans to for a single CGT rate of 18% "every step of the way".

Mr Cameron said the chancellor Alistair Darling should abandon plans that were confusing and would hit entrepreneurs.

Mr Darling said he was talking to firms on this issue and his final proposals would be made within three weeks.

The chancellor also said: "I know that my proposals to introduce a single rate of capital gains tax have been controversial. That was inevitable."

'Sticking plaster'

The simplification of the CGT system was meant to allow the Treasury to raise more money from the businesspeople who run private equity firms.

If the chancellor fails to abandon or radically alter his approach, we will fight this tax hike on Britain's entrepreneurs every step of the way
David Cameron

It was claimed that they were using a mechanism called taper relief - which was put in place to encourage entrepreneurship and reward people who start their own businesses - to lower their tax bill and unfairly boosting earnings.

The taper gradually relief reduces the tax rate over a period of time, in an attempt to encourage more long-term investment.

Business groups like the CBI, among others, have attacked the plan to abolish the taper relief, saying that the proposed flat tax rate would act as a brake on business and discourage new firms from starting in the UK.

Mr Cameron said that the chancellor "must tell us what the capital gains tax system will look like in five months time".

HAVE YOUR SAY
This is clearly a move aimed at pacifying the richer classes of society at the cost of the less well-off
Ambriel

During the first day of the event on Monday, Gordon Brown said he would "listen and discuss" the thorny issue of CGT reform.

"If the chancellor attempts further changes, in order to recover the situation, they must not be sticking plaster changes to proposals that have so angered entrepreneurs," said Mr Cameron.

"If the chancellor fails to abandon or radically alter his approach, we will fight this tax hike on Britain's entrepreneurs every step of the way, inside and outside parliament," he added.

While Mr Darling gave no further clarification on CGT he said that: "Maintaining Britain as a good place to do business means ensuring we have a tax regime that is competitive, fair and simple."

He reiterated plans announced in the Budget that corporation tax would be cut and so would the basic rate of income tax, "helping not just the self-employed but small businesses too".

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