Lib Dems refuse to compete on tax cuts

Lib Dems refuse to compete on tax cuts

The Liberal Democrats have opted out of the tax-cutting war between the Labour and Conservative parties.

Treasury spokeswoman Malcolm Bruce will make it clear next week that while he sees no need for large tax increases, he is opposed to trying to outbid the Tories’ 20p in the pound basic income tax rate promise or Labour’s proposal for a 10p lower rate.

Instead, Liberal Democrats at their annual conference in Brighton will promise to raise the threshold for paying income tax by increasing the basic allowance.

Other tax proposals to be put to delegates will include: transferring the basis for water charges from rateable value to a system similar to Council Tax; a phasing in of carbon tax and reduction in VAT on hotel and restaurant bills to 5% to boost tourism.

Other policy changes will include requiring water companies to fund more of their investment through borrowing or equity raising.

Conference will also demand an Audit Commission investigation into the value for money of competitive bid programmes.

Delegates will complain they cause local authorities to waste large sums of money on unsuccessful schemes.

A motion will admit competition can bring benefits, particularly for small scale programmes designed to encourage innovation. But it protests: ‘The process has gone too far, thanks to the Government’s ideological obsession with competition and private sector involvement.’

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