Tories call for inheritance tax end

Among the measures proposed by Mr Redwood, who was appointed by David Cameron to head the party's review on economic competitiveness, is the abolition of inheritance tax.

Although the party leadership is not bound to accept the review's findings, shadow chancellor George Osborne said he "liked the look" of the plans.

On inheritance tax, he told BBC Radio 4's Today programme the Tories were "looking at whether we can afford to get rid of it or reform it in some way".

Mr Redwood told Today the UK should follow the Irish example by cutting business taxes in order to stimulate economic growth, the proceeds of which can then be invested in public services.

"The idea is to reform and lower capital taxes and company taxes so that we get far more growth in the economy," he told BBC Radio 4's Today programme.

Labour have branded the tax-cutting measures a "lurch to the right" - a claim strongly denied by Mr Redwood.

Confronting Labour's claims that tax cuts would be funded by slashing spending on public services, he said: "We have looked very closely at the Irish experience and since the late 1980s in Ireland public spending has gone up 220% compared with 120% in the UK because they have had a massive four-fold increase in tax receipts.

"Why have they got all that extra tax? Because they cut capital taxes, they cut business taxes. It is the way to go, it is the way to give you more money for public spending. Ironically, it is the way to get more money out of the rich, but everybody benefits."

Mr Redwood proposed cutting corporation tax, and said that people were paying 40% income tax too soon on the salary scale. He said the proposals were designed to help people currently out of work by creating more jobs.