Former minister Liam Fox calls for capital gains tax holiday

• Fox calls for benefits cuts and wants to make it easier to hire and fire workers

• MP says Tories facing defeat at next election

Dr Fox, who quit David Cameron’s government last year after disclosures over his unofficial aide Adam Werritty, also called for cuts in benefits for those in employment and changes to make it easier to hire and fire workers.

He warned that the Conservatives are facing defeat at the 2015 general election unless they take risks to restore growth.

Meanwhile, Tory MP Sir Gerald Howarth, who was sacked last week from his ministerial post, urged Mr Cameron to reverse plans to increase aid spending while cutting back on defence.

“I have yet to meet a Conservative who thinks we should be spending more money on overseas aid,” former defence minister Sir Gerald said. “My message to the Prime Minister and the Cabinet is to give defence a higher priority at the moment.”

Dr Fox joined fellow senior backbencher David Davis earlier this week in launching the Conservative Voice group to promote traditionalist Tory views, in what was widely seen as an effort to push the party back to the right after years of Cameron “modernisation”.

Asked yesterday whether Mr Cameron was the right man to lead the Tories into the election, the former defence secretary said: “Yes, I think the PM is capable of delivering that.”

But he said that Chancellor George Osborne’s deficit reduction policy was not enough to revive the economy, warning: “If we don’t take some risks, we’ll not get growth.”

decision on airport capacity in the South-East being put off until after the election, saying: “I would really hope we could bring that forward.”