Amid growing speculation that right-wing Conservative MPs will trigger a vote of confidence in Mr Cameron's leadership, Dr Fox will call for benefit cuts matched by tax cuts to help create a new "small state". He will call on the Conservatives to build "a society that is sustainable for the future in the way that our current - welfare dependent and debt ridden - economy is not."
In a speech to the Institute of Economic Affairs, the former Cabinet minister will say: "I would like to see CGT reduced, if possible to zero, for a defined period before being reintroduced at a more sensible level. 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 to the market."
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