28 February 2003
The Liberal Democrats outlined their alternative 'cash-back' Budget this week, pledging free care for the elderly and the abolition of tuition and top-up fees for students, but no increases in public spending.
The party's new economic strategy was being flagged as a 'radical root-and-branch reform', which includes dropping its longstanding policy to raise income tax by 1p in the pound for education.
The centrepiece of the LibDems' Budget is a 50% rate of income tax for those earning more than £100,000.
The policy, which has obvious appeal to Left-wing voters, would raise an estimated £4.5bn a year and is designed to 'distribute the tax burden more fairly'.
Of this extra revenue, £2bn would be used to abolish tuition and top-up fees while the remainder would be used to reduce households' council tax bills by £100 a year.
With council tax rises looking to hit all-time highs of between 15% and 27% in some areas, the party will be seeking to increase its share of council seats in May's local elections.
National Insurance would also be turned into a permanent ringfenced fund for the NHS. Pensioners would receive increases to the basic state pension.
The Treasury's 'unspent' Capital Modernisation Fund would be reallocated to rail to reverse the recent cuts in services announced by the Strategic Rail Authority.
The policy, outlined on February 26, would also include the reallocation of cash set aside for bed-blocking fines to fund extra social care beds, and a restructuring of the Department of Trade and Industry to reduce subsidies to industry.
LibDem Treasury spokesman Matthew Taylor said the party would also ask the National Audit Office to conduct a thorough 'economic health check' of British public spending.
'We have already made a start to put a halt to misspending, miscalculating and mismanaging taxpayers' money. Billions of pounds are being misspent on the wrong priorities,' Taylor said.
'[This would] allow us to spend more on the things that really matter – health care, education, transport and local services.'
PFfeb2003
