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Last Updated: Sunday, 27 August 2006, 12:38 GMT 13:38 UK
Tory party hints at tax cut plan
George Osborne
George Osborne says he wants to look at stamp duty on shares
The Tories have given their first major hint of plans for a tax cut since David Cameron became party leader.

Shadow chancellor George Osborne has told the Sunday Telegraph he wants to look at abolishing stamp duty on share trading, to help boost pensions.

A think tank's pamphlet will say such a move would put some 4bn back into the stock market, boosting pension funds, which are major stock owners.

But the Treasury said that would leave a 4bn gap in public finances.

The government abolished tax relief on pension fund trading in 1998.

'Repairing the damage'

Cutting stamp duty would add up to 80bn to share values and boost pension funds, the centre-right think tank the Bow Group will say in a pamphlet next week, according to the Sunday Telegraph.

"Of all the damaging things Gordon Brown has done to the economy, the single most destructive has been the attack on personal pensions," Mr Osborne said.

Repairing that damage "has got to be a top priority", he said.

"Sadly, simply reversing the pensions tax he imposed in 1998 wouldn't work, as many final salary schemes have closed.

"We need to look at new ways of repairing the damage and that is why I am particularly keen to look at stamp duty on shares."

But the Treasury said: "Anyone who wants to abolish this tax need to explain how to plug the 4bn gap in public finances.

"That's double the amount that we're spending this year on counter-terrorism and security."

It added Chancellor Gordon Brown's record on the economy "speaks for itself".

Shadow education secretary David Willetts told the BBC he understood people's "deep frustration" at the tax system and the Tories had a commission looking at its reform.

"Gordon Brown has made a such a mess of tax we're spoilt for choice," he said.

But he said reform would come only if "these can be afforded as part of our prudent, careful management of the economy".

Inheritance tax

A report by the Conservatives' policy commission on tax is out in October with another report by the party's competitiveness commission due out next year.

BBC political correspondent Robin Brant said cutting tax had previously been a number one priority for the Tories.

"But now ensuring economic stability comes above that."

Mr Osborne told the Sunday Telegraph he examining taking more low paid people out of tax altogether.

He also said he "basically agreed" with Labour former Cabinet minister Stephen Byers, who last week said inheritance tax should be scrapped, although he could not give "some cast-iron commitment" to abolish it.

A report in The Sunday Times newspaper says one in five Britons - the equivalent of 10m adults - say they are considering leaving the country because they feel they are paying too much tax.

A poll of 1,000 people was carried out by ICM on behalf of the Taxpayers' Alliance (TPA), an independent political lobbying group.

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