09 June 2006
The Liberal Democrats this week set out a radical new package of tax measures in a striking change of direction and a bid to win the backing of the low paid and middle Britain.
Early proposals to emerge from the party's Tax Commission would see the party abandoning its long-held policy of a 50p tax rate on incomes over £100,000 and slashing the basic rate of income tax by 2p, lifting some 2 million people out of taxation altogether. The upper rate threshold would be raised, meaning a further 1.2 million people would not be paying the top rate of income tax.
The LibDems also want to return environmental taxation to 1999 levels – back to 3.6% of gross domestic product from current rates of 3% – through increased aviation tax, sharp rises in vehicle excise duty on the most polluting cars and a reformed climate change levy. More detailed recommendations are expected to follow next month.
LibDem leader Sir Menzies Campbell set out the plans in a keynote speech delivered on June 8 to mark the first 100 days of his leadership.
Speaking to Public Finance ahead of Campbell's speech, LibDem Treasury spokeswoman Julia Goldsworthy stressed the proposals would balance out inequalities in the tax system between the richest and poorest.
'We want to make the tax system fairer, simpler and greener,' she said, adding that all the proposals sat within a tax neutral framework – an important change of direction for the party.
'As a point of principle we're not going to be arguing for higher taxes,' Goldsworthy said.
Although the LibDem Treasury team may have made their minds up, the plans still have to be debated and approved by the party faithful at September's conference.
PFjun2006
