Taxation

Written by Paul Elgood and published in Latest 7 Magazine on Thu 24th Mar 2005

The mark of a good society is creating opportunity for young people, security for older people and a fair tax system that caters for it.

Liberal Democrats have always been open and honest about how we would pay for our policies. At the last three general elections, we set out full details of how much our policies would cost and how we would pay for them - none of the other parties did this. Since Labour have now put up taxes, we don't need to raise taxes for most of our proposals - we have detailed plans to fund them by savings in current budgets. That will involve switching around £5 billion from lower priority programmes and unnecessary bureaucracy to our priorities. Key proposals include cutting subsidies by will abolishing the DTI; reduce spending by DEFRA; adopt competitive procurement in defence; and abolish many local area initiatives. We would scrap the Chancellor's Child Trust Fund and use the money for children's early years education and support. The Child Trust Fund will cost £1.25 billion over a Parliament. A much better way to help the next generation is to invest in children's early years. Hundreds of millions can be saved by not introducing ID cards. That money would, we believe, be better spent on increasing the number of police on our streets. We want to create a fairer distribution of the costs of paying for public services, because it cannot be right that - as at present - people on low incomes or in old age proportionally have to pay so much more of their income in taxes and government charges than those who are much better off. Three of our key policies are about creating a fairer distribution of the costs of public services by scrapping tuition and top-up fees for students; introducing free personal care for elderly and disabled people and keeping down the rate of local taxes. These three items add up to £4.3 billion and we will pay for them by one tax change, introducing a new 50% rate on very high individual income in so far as it exceeds £100,000 a year.