UK opposition woos voters with tax cut pledges

Britain's opposition Conservatives, on alert for a snap election, promised cuts in inheritance and property taxes yesterday, pledging to fund them with a levy on wealthy foreigners who pay little tax in Britain.

Business experts voiced concern that targeting the rich could drive away wealth and expertise from London's financial centre, an engine of British prosperity, and weaken the economy. Finance minister Alistair Darling said the sums did not add up.

The Conservatives' finance spokesman, George Osborne, said there was a clear dividing line between Prime Minister Gordon Brown's high-taxing Labour government and a Conservative Party he said was "the party of aspiration".

"I for one am happy to put these clear choices before the British people at a general election," he told the party's annual conference in the northern seaside resort of Blackpool.

Mr Brown's Labour Party has taken a lead of up to 11 points over the Conservatives in opinion polls, tempting Mr Brown to consider calling a snap general election this month or next.

Gordon Brown, who replaced Tony Blair in June, would be aiming to give Labour a record fourth consecutive election victory.

In a proposal sure to resonate with the British middle classes, Mr Osborne said a Conservative government would spare nine million people from paying inheritance taxes - duties on the wealth bequeathed in wills.

Soaring house prices in the past decade have sucked many middle-class families into the net for the tax.

Mr Osborne's promise that, if elected, the Conservatives would raise the threshold at which death duties must be paid on estates to £1 million, from £300,000 now, brought cheers from the party faithful.

He also announced plans to help first-time home buyers by exempting most of them from a tax on property sales.

Both measures would be financed through an annual levy of £25,000 a year on rich foreigners living in Britain who pay no tax on their overseas income.

Wealthy foreigners such as Chelsea football club owner Roman Abramovich and steel magnate Lakshmi Mittal have flocked to London, but the relatively small amount of tax paid by people who do not have their tax base in Britain has sparked anger.

The Conservatives estimated that the levy would bring in £3.5 billion a year, exactly covering the cost of the inheritance and property tax giveaways.