Liam Fox calls for radical change in economic strategy

liam fox Mr Fox will call on the government to freeze public spending while cutting taxes and the deficit

A senior Conservative is to call on the government to freeze public spending for five years and spend the money saved on cutting both taxes and the deficit.

The former defence secretary Liam Fox will use a speech this morning to argue for an economic policy which he will argue would change the "terms of trade in the political debate".

With the Budget just over a week away, Fox becomes the latest senior coalition figure to call on the government to radically change its economic strategy.

A freeze of all public spending - as against the current freeze for Whitehall departmental budgets - would cut spending in real terms by 2.5 per cent a year as against the current plan for a one per cent annual cut.

This would, Fox calculates, save a cumulative total of £345bn which could be used to cut taxes - starting with the temporary abolition of Capital Gains Tax - at the same time as cutting the deficit.

Fox will also call for an end to the ring-fencing of budgets for the NHS, schools and international development, and the end of universal benefits such as the pensioners' winter fuel allowance.

So, a leading representative of the Tory right is matching one part of the call made last week by the Liberal Democrat Business Secretary Vince Cable to think the previously unthinkable on public spending.

There is no prospect of the chancellor adopting this policy in the Budget, but this speech is part of the battle being waged increasingly in public about the pitch the Conservatives should make at the next election if they are to avoid defeat.

Nick Robinson Article written by Nick Robinson Nick Robinson Political editor

Cameron: Talk of 'better times' rather than austerity

David Cameron and his party came to Birmingham fearing the worst but they leave here believing they might just still be in with a chance.

Read full article

More on This Story

More from Nick

Features & Analysis

  • Cerro RicoSatanic mines

    Devil worship in the tunnels of the man-eating mountain


  • Nefertiti MenoeWar of words

    The woman who sparked a row over 'speaking white'


  • Oil pumpPump change

    What would ending the US oil export ban do to petrol prices?


  • Brazilian Scene, Ceara, in 1893Sir Snapshot

    19th Century Brazil seen through the eyes of an Englishman


Elsewhere on the BBC

  • SailingGame on

    BBC Capital discovers why certain sports seem to have a special appeal for those with deep pockets

Programmes

  • European Union's anti-terrorism chief Gilles de KerchoveHARDtalk Watch

    Anti-terrorism chief Gilles de Kerchove on the threat from returning Islamic State fighters

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.