Lib Dems Call For Air Travel Tax,2p Cut
By Tania Branigan, The Guardian | Jun. 05, 2006
The Liberal Democrats will this week outflank the Tories by proposing a 2p cut in the basic rate of income tax and an increase in personal allowances.
The plans, which drop a commitment to a 50p top tax rate for those earning more than ?100,000 a year, come days after the shadow chancellor, George Osborne, said the Conservatives were "very unlikely" to promise cuts in the near future.
But Vincent Cable, the Lib Dem treasury spokesman, insisted the new package would be more redistributive than either the existing regime or the Lib Dems' current proposals. The overall tax burden would remain the same, with an increase in taxes on the wealthy - particularly capital gains - and tougher green taxes paying for the other cuts.
"The framework is fairer, not higher taxes," Mr Cable said yesterday, explaining that he wanted to take people on low incomes out of the system altogether through a "substantial" rise in personal allowances. The basic rate would fall from 22p in the pound to 20p.
The Lib Dems also want higher excise on gas-guzzling cars and are the first major party to bite the bullet on aviation taxes. Mr Cable insisted the plans were not elitist, putting foreign holidays beyond the reach of low-income households, because they would tax planes rather than passengers. "There will be some pain. But a packed charter flight might not be very much more. A half-full airliner of businessmen would cost quite a bit more," he said, citing praise from one charter firm.
The proposals from the party's tax commission will be outlined by Sir Menzies Campbell in a speech this week. The commission's report will be issued in July, before the notoriously independent Lib Dem members vote on them at the autumn conference. "They may well be changed or thrown out," Mr Cable admitted.
A Treasury spokesman questioned whether the numbers would stack up, while Mr Osborne said: "The Lib Dems are never going to be in a position to implement a budget, so they are allowed to come up with all sorts of strange ideas."
David Cameron will tomorrow underline the Conservatives' attempt to claim the centre ground by telling businesses they can learn from the public sector as well as vice versa. The Tories have attacked the growth of the public sector under Labour, but in a speech to the National Consumer Council, Mr Cameron will admit: "We have sometimes risked giving the impression that we see those who work in the public sector as burdens on the state rather than dedicated professionals who work hard to improve the quality of people's lives."
In a swipe at the home secretary, John Reid, he will add: "When I hear ministers bashing bureaucrats - or declaring that their departments are 'not fit for purpose' - I wish they'd have the decency to admit that it's their policies that are at fault, not the people who work for them."