"Liberal Democrats Tax Plans will be fairer not higher", says Eleanor Key

4.30.49pm BST (GMT +0100) Thu 21st Apr 2005

Eleanor Key is concerned that other parties have claimed that Liberal Democrats will impose over 40 new taxes.

"This is untrue. We have been very clear and honest about our tax policy - the only tax increase the Liberal Democrats propose is a 50p tax ceiling for the highest 1% of earners on the portion of their income over £100,000 a year. Our tax plans means tax cuts for most households but rises for the very top earners.

"The revenue raised from this tax will be used to fund three of our key policies which are about creating fairer distribution of the costs of public services:

• Scrapping tuition fees and top-up fees for students. Cost: £1.5 billion.

• Introducing free personal care for elderly and disabled people. Cost up to £1.7 billion.

• Keeping down the rate of local taxes. Cost £2.3 billion.

"We also plan to scrap the unfair Council Tax," said Eleanor Key, who also confirmed that the Institute of Fiscal Studies' (IPS) analysis of the Liberal Democrat Local Income Tax Plans proves that the majority of people would benefit under proposals to scrap Council Tax.

"Half of Britain's families will be significantly better off, with another quarter paying about the same. Crucially, eight million pensioners would be better off, with more than half of the pensioners paying nothing at all.

"There will be no more losers under the Local Income Tax than under Labour and Tory proposals for Council Tax Revaluation. The difference is that with revaluation, the losers will be selected at random, according to the vagaries of the property market, rather than the ability to pay."

"We also plan to review and change the tax system to make it fairer - but these are changes not rises. Since Labour have now put up taxes, we don't need to.

"For instance, we pay 17% VAT on all renovation and extensions to existing buildings but there is no VAT on new build ones. This makes it cheaper to build on greenfield sites rather than renovate existing buildings. This is sending the wrong message on conservation and climate change. We will spread the tax burden evenly between the renovation and new-build.

"We pay tax on petrol for our cars but the airlines pay tax per passenger not on fuel - there is no incentive for them to fly fuller planes and reduce pollution.

"We plan to make taxes fairer - we want to redress the balance and support change."