THE front-runner in the race for the Liberal Democrat leadership has been told that his tax plans could cost £21 billion.

The Institute for Fiscal Studies has calculated that Chris Huhne’s commitment to exclude people on the £5.05-an-hour minimum wage from paying tax would lead to an increase in income tax equivalent to 5.5p in the pound. Mr Huhne has pledged to increase environmental taxes to meet the cost of his programme.

Stuart Adam, a senior research economist at the institute, said: “As a first approximation, this income tax cut would cost roughly £21 billion, some 1.7 per cent of national income or 4.2 per cent of the total revenue the Chancellor expects to receive this year.

“It is almost equivalent to the total amount that the Government receives each year in fuel duty. Mr Huhne’s proposal is an enormous tax cut by recent standards and may require an equally big tax rise to pay for it.”

The former MEP, who was elected to Parliament last year, wrote in his manifesto: “It is crazy to say that people should have a minimum wage then take it away in income tax.”

Another possible source of embarrassment for Mr Huhne is an article he wrote for the Oxford student newspaper, Isis, in the early 1970s. In the article, a copy of which has been passed to The Times, he argued that drugs should be accepted as part of society.

“Cannabis grows in effect the more you smoke, and the first time it is tried will often be ineffectual,” he wrote. “Hash relieves symptoms of anxiety, promotes a mild euphoria and mental and physical lassitude. For these reasons it is a singularly apt drug when work, or love, or lifestyle become too intolerable to undergo.

“Drinking encourages boisterous and aggressive behaviour while cannabis leaves its subjects passive, intimate, and content to meander through the normal world. Opium is available in Oxford and in its natural form can be safely experimented with. It should not need restating: students are adults fully capable of making their choice of intoxicants.”

Mr Huhne, who studied PPE at Magdalen College, wrote the article in 1973. He graduated two years later.

His entry into the leadership contest was a surprise, as he had pledged his support over a handshake to Sir Menzies Campbell, the early front-runner. He began the race as the dark horse to succeed Charles Kennedy but is now the bookmakers’ favourite.

Times Recommends

• Charles blazes trail as sun king
• Thalidomiders win payout 50 years on
• Libel gag on talk of 'medical hurricane'