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Edition: U.S. Article Comments (0) Video Save Email Print Reprints Most Popular Most Shared Bangkok burns as protest leaders surrender | Video 3:48pm EDT Democrats, Republicans see hope in political rubble 2:58pm EDT Euro rallies but global stocks slip on German ban | Video 1:22pm EDT Stocks slip on concerns over German trading ban 4:36pm EDT U.S. reverses stance on treaty to regulate arms trade 14 Oct 2009 "Savagely beaten" Stanford asks to be freed 18 May 2010 Google beats Microsoft in smartphones, catching Apple | Video 11:37am EDT UPDATE 1-Florida Keys tar balls are not from BP oil spill 9:09am EDT Analysts' View: Thai protest leaders surrender 5:04am EDT Germany declares solo war on speculators 1:49pm EDT Study suggests processed meat a real health risk 17 May 2010 U.S. reverses stance on treaty to regulate arms trade 14 Oct 2009 Bangkok burns as protest leaders surrender | Video 3:48pm EDT Google beats Microsoft in smartphones, catching Apple | Video 11:37am EDT U.S. jury decides $250 million damages against Novartis 11:45am EDT Pesticides tied to ADHD in children in U.S. study 17 May 2010 Professional social networking booming 18 May 2010 Twitter expects hundreds of advertisers 8:23am EDT Democrats, Republicans see hope in political rubble 2:58pm EDT UPDATE 1-One in 7 US homeowners paying late or in foreclosure 12:04pm EDT Britain's coalition faces internal rumblings on tax Estelle Shirbon LONDON Wed May 19, 2010 2:41pm EDT Related News FACTBOX-Policies agreed by UK's new coalition government Wed, May 12 2010 FACTBOX-Key risks to watch in coalition-era Britain Wed, May 12 2010 FACTBOX-Policies agreed by UK's new coalition government Wed, May 12 2010 FACTBOX-Policies agreed by UK's new coalition government Tue, May 11 2010 FACTBOX-Polices agreed by UK's new coalition government Tue, May 11 2010 Related Video UK Deputy PM plans radical change 12:57pm EDT Britain's Prime Minister David Cameron conducts a meeting with permanent secretaries from government departments in Westminster, May 19, 2010. Credit: Reuters/Johnny Green/POOL LONDON (Reuters) - Early signs of the policy tensions that will test Britain's new coalition government have surfaced, with a senior Conservative legislator attacking the taxation stance of his party's Liberal Democrat junior partners. World The Conservatives won most parliamentary seats in a May 6 election but fell short of an overall majority and had to join forces with the third-placed Lib Dems to take office last week, ending 13 years of government by the Labour Party. The center-right Conservatives made several big concessions toward the center-left Lib Dems to secure their support, including on tax. The Conservatives shelved a cherished promise to cut inheritance tax, for example, while adopting a Lib Dem ambition to raise the threshold for paying income tax. John Redwood, a Conservative member of parliament (MP) and former minister, has published a blog in which he slams Lib Dem beliefs on taxation and seeks to counter their influence on a specific policy debate about capital gains tax. "Deep in Lib Dem DNA is the Robin Hood principle -- tax the rich and give to the poor. It is superficially popular, and gives believers a feeling of moral superiority," Redwood wrote. A representative of the right wing of the Conservative Party who was once an adviser to former Prime Minister Margaret Thatcher, Redwood particularly objected to the Lib Dem idea of taxing capital gains at the same rates as income. "This is anathema to most Conservatives," he wrote, adding that the policy would deter investment and send talent abroad. "OPEN TO PERSUASION" Speaking to Reuters on Wednesday, Redwood said his intention was not to rebel against the government but rather to make a helpful contribution to discussions within the coalition. "I'm not planning a rebellion. There's nothing to rebel against. We have a government which is going to work on a new policy. It's open to persuasion and discussion. I'm helping them, as I see it," he said. But his strongly worded blog, in which he disclosed that he and other MPs had "worked into the night" on Monday to come up with alternative proposals on capital gains tax, gave an indication of the fierce battles ahead for the government. In their coalition agreement, the two parties committed only "to seek a detailed agreement on taxing non-business capital gains at rates similar or close to those applied to income, with generous exemptions for entrepreneurial business activities." That could potentially mean that capital gains tax on the sale of assets such as properties or shares would rise, to the detriment of some of Britain's more affluent households who tend to be Conservative supporters. In his blog, Redwood suggested raising capital gains tax on "short term gains made by speculators" while exempting from it any investment gains made over five years or more. -- To read John Redwood's blog, please go to www.johnredwoodsdiary.com/ (Editing by Myra MacDonald) World Add a Comment *We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language or appear to be spam and review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. © Copyright 2010 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Analyst Research Mobile Newsletters RSS Podcasts Widgets Your View Labs Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts Venture Capital Journal International Financing Review Project Finance International PEhub.com PE Week Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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