'Tories should have focused on tax cuts'

One of the Tories' biggest donors today said the party should have focused more on tax cuts and a "positive vision" of Britain in its election campaign.

IG Index spread betting tycoon Stuart Wheeler spoke out after fellow donor Lord Kalms called for Michael Howard to quit immediately as leader.

Mr Wheeler stressed he had no criticism of Mr Howard, but made clear he felt the Conservatives made a mistake in not offering tax cuts in their first budget. He said it would be best if Mr Howard were to stand aside soon after the party's leadership rules have been overhauled.

Some of the Tory leader's supporters suggested today that he would stay on longer than previously thought, possibly until next spring or summer, to switch attention to the Government's troubles.

Mr Wheeler, who gave £5 million to the party in the last Parliament, was one of a string of donors whose unease led to the removal of Iain Duncan Smith. He said today that Mr Howard had not had enough time before the election to oversee bigger policy changes, but tax should have had a more prominent role in the pitch to voters.

"I would have said a little more about tax," he said. "It would have been quite nice to say in the first budget of a Tory government that tax cuts would take place immediately. It would have meant sorting out other spending pledges, but we were only talking about £4billion.

"I know it is not politically correct to say it, but people do like lower taxes. It can be done, as the James review showed, without harming spending on important public services. I'm definitely on the side of old-fashioned, economic Toryism, lower taxes and better organisation of public services."

Lord Kalms, a former party treasurer and Dixons boss, said Mr Howard did "a terrific job" but is now "a lame duck leader". He singled out leadership contender David Davis for praise and said he would like to see a new leader elected as quickly as possible.

But Lord Heseltine said the way the party operates should not be dictated by a few big donors and warned of how old Labour was "shackled" by the money of the trade unions. Meanwhile, Oliver Letwin announced he will be stepping down as shadow chancellor.