LibDems set out local income tax in their alternative Budget

11 Apr 02
The Liberal Democrats pledged to create a 'world-class NHS' with more investment than ever before when they unveiled their alternative Budget on April 8.

12 April 2002

Treasury spokesman Matthew Taylor said he would introduce a 50% tax rate for those earning more than £100,000 per year, which would be used to fund £4.4bn of extra investment in the health service. But this would not constitute a formal hypothecated health tax.

Taylor also committed the LibDems to introducing a local income tax to fund education. This would be matched by a corresponding reduction in national taxation.

'Investment is vital. This country's public services are chronically underfunded, and they cannot deliver high-quality services until this is put right,' Taylor said. 'Our choice is clear and unequivocal, investment in schools, hospital and pensions funded by a balanced and transparent tax policy.'

The party used its alternative Budget to make a bid for support from public sector workers, signalling its 'serious concerns' about the increasing use of the private sector to deliver core public services.

'There is limited evidence on the achievement of improved value for money from existing Private Finance Initiative projects and public-private partnerships and we have regularly pointed out that private sector involvement by itself does not increase funding for public services.'

But the document made clear the LibDems would not end private sector involvement if it were shown to be successful. It said: 'The ownership of the service provider should not be approached dogmatically, whether private or public sector.'


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