Ming drops tax and spend

Sir Menzies Campbell today warned the wealthy that their tax breaks on
pensions and capital gains would be axed under any government including the
Liberal Democrats.

He issued the promise as he dramatically took on his high-spend activists by
telling them the Lib Dems would no longer support the Treasury taking more cash
from people’s pay packet to pay for public services.

Boosted by Tuesday’s decision to ditch the 50 pence in the £1 top rate for
high earners, the Lib Dem leader went further and dumped his party’s historic
commitment to higher taxes.

He told a stunned Brighton conference there would be no rise in the overall
level of taxation in any administration including the party.

He made clear that if the Lib Dems were serious about seeking to move from
Opposition towards Government the old image of the party founded in 1989 of high
tax to pay for high spending would have to go.

Campbell said bluntly: ‘We will not raise the overall level of taxation. But
we will reform the tax system so that it is fairer, simpler and greener. Under
our plans, some will pay more. We are straightforward about this.The very
wealthy will lose their generous pension tax subsidies.

‘Tax breaks on capital gains will be removed. Those who can afford to make a
greater contribution should do so. And we will raise environmental taxes too.
All of us should pay tax on the pollution we cause. Yes – it means taxing
aviation properly. Yes – it means fuel duty going up with inflation. And yes –
it means paying more for the cars that pollute most.

‘If we are serious about the environment, only action will suffice.’

In a clear reference to his own decision to ditch his beloved Jaguar XJS
coupe, Menzies said: ‘Our tax reforms are not about posturing on the
environment.
‘We’ve seen enough of that over the last year. This is about taking the
decisions that will help us live up to our responsibilities at home and abroad.’

He told the delegates that they could sell a package that would abolish the
10p starting rate for income tax, cut the basic rate to 20p, raise the top rate
threshold to £50,000, cutting national income tax to 28 million working people
and taking two million of the poorest working families out of it altogether to
put money back in their pockets.

He said: ‘We will reward ambition and aspiration – not penalise effort. Let
me tell you how we will pay for it. Not by higher taxes. Income tax cuts for
hard working people. The polluter paying the price. Taxing wealth does not work.
Now this is the politics of substance. It’s fairness in action. It’s
environmentalism in action.’