Image caption Liam Fox says he believes David Cameron should lead the Tories at the next general election

Former Defence Secretary Liam Fox has urged the government to cut taxes in an effort to stimulate economic growth.

In an interview in the Times newspaper, Mr Fox called for capital gains tax to be suspended for three years.

He also said employment laws should be reformed to make it easier to hire and fire employees.

Although he wants to see a change in economic policy, he said there was not a need for the Conservatives to change their leader.

Mr Fox resigned as defence secretary in October last year after questions were asked about his working relationship with his friend and self-styled adviser Adam Werritty.

Earlier this week Mr Fox helped to launch a new group, Conservative Voice, which aims to put forward "seriously ambitious" policies on tax, Europe, public services and political reform, as well as beefing up the Tories' campaigning skills.

BBC political correspondent Iain Watson says politicians are often united in calling on the government to do more to boost economic growth, but they are divided over just how to reinvigorate a sluggish economy.

Labour favours a temporary reduction in VAT and a slower pace of spending cuts, he says, and now, from the right wing of the Conservative Party, Mr Fox has a radical tax cut of his own in mind.

'Row together'

He wants to see capital gains tax - a levy on the profits from asset sales - suspended for three years.

Mr Fox told the Times this would "ricochet around the world" - and signal that Britain was open for business.

Mr Fox said: "If we don't take some risks we'll not get growth and if we don't get growth, we'll not get re-election."

Our correspondent adds that Mr Fox's "salvo is also aimed at the Lib Dems, who have successfully argued for an increase in this very tax".

Mr Fox challenges the Tory side of the coalition too and says benefits for better-off pensioners, which David Cameron has pledged to protect, should not be sacrosanct.

He also stepped into the row over a third runway at Heathrow, accusing the government of "indecision" and warned of a revolt by Tory backbenchers if ministers seek to find a cheaper alternative to the replacement of Trident nuclear missiles and submarines.

'Defence, not aid'

Mr Fox also played down talk of a leadership plot against Mr Cameron, saying: "We are all going to have to realise that we need to row in together over the next few years as we need to deliver a majority Conservative government."

Meanwhile, a defence minister who lost his job in last week's reshuffle has urged Mr Cameron to reverse cuts to the defence budget and stop spending more on overseas aid.

Sir Gerald Howarth said he would like to see axed defence programmes revived when economic circumstances allowed.

He also contrasted the 7% cut in defence with the rise in financial support for international development.

"I have yet to meet a Conservative who thinks we should be spending more money on overseas aid," he told the BBC.