Tory tax reforms spark war of words

Labour warned that the plans, put forward by former Cabinet minister John Redwood, would require "crippling" increases in fuel duty and other charges for homeowners, businesses, holidaymakers and motorists.

If massive "green" levies were not introduced to offset measures such as reducing inheritance tax then public services would suffer, according to Chief Treasury Secretary Andy Burnham.

"David Cameron needs to come back from his holiday in France with some honest answers for the British people about his tax plans," Mr Burnham said.

But the claims were immediately dismissed as "pathetic" by the Conservatives.

Writing in the Mail on Sunday, Shadow Chancellor George Osborne accused Labour of being "scared of a proper debate" on tax.

"This weekend the Labour Party showed how rattled it is by firing off a string of muddled attacks on the report, revealing just how scared they are of a proper debate about taxes, such as inheritance tax.

"Surely what the country wants to see from its political leaders is a mature discussion about how they help Britain's families?"

The Tory leadership has refused to make firm commitments on any of the plans in Friday's wide-ranging report by the economic competitiveness policy group.

But Mr Osborne signalled that he supported the principle of an individual's main home being exempted from death duties. "We want to reduce taxes over time, but I've made it clear that any immediate reforms would have to be paid for with corresponding tax increases elsewhere, so that public finances remain safe," he wrote.