Tax system should be fundamentally rebalanced, say Liberal Democrats

11.01.00am GMT Wed 12th Nov 2008

Nick Clegg MP and Lib Dem Treasury Spokesman, Vince Cable, have made bold plans to cut the tax burden for low- and middle-income earners.

Liberal Democrats in Cardiff North are calling for Britain's unfair tax system to be fundamentally rebalanced by giving big tax cuts to people on low and middle incomes and asking the rich to pay their fair share.

In a speech to the Royal Commonwealth Society yesterday, Lib Dem Leader Nick Clegg discussed how Britain should respond to the global recession. He argued that now is the time for ambitious tax cuts to stimulate the economy not 'timidity and tinkering'.

Liberal Democrat plans would reduce basic rate income tax by 4p in the pound, giving nearly £1,000 back to a worker on £30,000 a year. This would be funded by closing tax loopholes enjoyed by the very wealthy and by increasing some green taxes.

Nick Clegg said: "We hear talk of tax cuts emerging from Downing Street, but they are likely to be small, and short term. Funded through borrowing, the money will have to be paid back later. So it's meagre tax cuts today, giant tax rises tomorrow from Brown."

Cardiff North campaigner, John Dixon, has welcomed pledges from the Liberal Democrats to cut tax.

"All people get from the Government is timidity and tinkering. Now is not the time for small-mindedness. It is a time for ambition. An opportunity to fundamentally re-balance Britain's unfair tax system. We would reduce basic rate income tax by 4p in the pound. That would give nearly £1000 back to a worker on £30,000 a year."

The Lib Dems have outlined four key pledges:

• ending upper rate pensions relief, so the wealthy don't get extra pension help from the tax man

• taxing capital gains at the same rates as income, so bankers and executives can't get away with paying 18% tax while their cleaners pay 31%

• green taxes to protect our environment

• tackling the scandal of corporate tax avoidance

Cllr. Ed Bridges has criticised Labour and the Conservative's flawed tax plans.

The pledges have been welcomed by Liberal Democrats locally. Cardiff North's Lib Dem Parliamentary spokesman, John Dixon, said: "We are promising REAL tax cuts - big, permanent and fair - for the people who need them. They will be funded by making the wealthy pay their fair share, ending the special exemptions and loopholes they've profited from for so long."

Gabalfa councillor, Ed Bridges, added: "Labour want to fund tax cuts through massive borrowing, which will only store up problems for later on. The Tories, meanwhile, are clinging to the old idea of tax cuts for the rich trickling down to the poor. It is only the Lib Dems who will cut taxes directly for low- and middle-income families without mortgaging Britain to the hilt."