Liam Fox calls for Osborne to dismantle our bloated state

Former defence secretary Liam Fox will today call upon chancellor George Osborne to dismantle the "bloated state". He will argue for all public spending to be frozen for the next five years in order to fund tax cuts and assault the deficit. A spending freeze would result in an annual real term cuts of around 2.5 per cent (as opposed to a current target of just one per cent).

Our politics reporter James Waterson:

“I would like to see capital gains reduced, if possible to zero, for a defined period before being reintroduced at a more sensible level,” Fox will tell the Institute of Economic Affairs.

“This would create a tax window where businesses that are sitting on assets might be encouraged to sell, investment in capital becomes more attractive and where hundreds of thousands of second homes might come on the market.”

(Full article)

"The trust of the markets takes years to establish, and can be lost very quickly. We are going to stick to our plans," a Cabinet minister told the Guardian.