Lib Dems: 'Can we deliver? This manifesto is the answer'

The message from Nick Clegg was stark: only our figures add up

A four-point plan to "hardwire fairness" into British society was set out by Nick Clegg yesterday that would represent his key demands if the Liberal Democrats hold the balance of power in a hung parliament. Launching his party's manifesto, he said its programme for power could be summed up by the single word "fairness". He listed his four priorities as tax cuts for most workers, extra cash for schools in poorer areas, a drive to create "green jobs" and sweeping political reform.

Mr Clegg dodged questions on his tactics in a hung parliament, insisting he was setting his sights on becoming Prime Minister. He said: "If you've looked at the Liberal Democrats and thought 'they've got the right ideas, but can they deliver?', this manifesto is the answer. We can and we will." But with polls consistently pointing to a hung parliament, the Liberal Democrat leader has a more realistic chance of being cast in the role of power-broker next month.

The manifesto listed a series of savings that could be made from Whitehall spending, but echoed Labour by warning that wielding the axe too early could choke off recovery. It put an overhaul of the tax system at the heart of the party's appeal to the country, with most voters promised they would be £700 better off. The £17bn cost would be partly be raised by closing tax loopholes exploited by the wealthy.

The party used the high-tech headquarters of the financial news company Bloomberg in the City of London for the launch. It explained it had chosen the venue to underline the rigour of the costings underpinning its manifesto. The Lib Dems hope the event, combined with this evening's appearance by Mr Clegg in the first televised leader's debate, will help them build on their poll performance which is hovering around 20 per cent.

The Tory and Labour leaders yesterday pitched for Lib Dem voters. David Cameron argued that people who wanted "a family-friendly, greener Britain, a more liberal Britain" should back his party, while Mr Brown said "the Liberals support us" on the economy.

Both parties also claimed the Liberal Democrat sums did not add up. Alistair Darling, the Chancellor, said their figures had been plucked from "fantasy land" and the Conservatives claimed to have identified an £11.6bn "black hole" in the numbers.

The Institute for Fiscal Studies also said some of the calculations looked "highly speculative".

Key points of the manifesto include:

Taxes

The most eye-catching pledge is to raise the income tax threshold to £10,000 a year, which the party says would make low and middle-income earners £700 better off and remove 3.6 million people from tax altogether.

The £17bn cost would be raised by a "mansion tax" on homes worth more than £2m, limiting pension tax relief to the basic rate, replacing air passenger duty with a per-plane levy, reforming capital gains tax and curbing tax avoidance.

A tax would be introduced on bank profits.

Spending cuts

Promising to be bold in slashing Britain's debts, the Lib Dems claim to have identified £15bn of savings. They include cuts in tax credit payments, imposing a £400 limit on public sector pay rises for two years and scrapping identity cards and biometric passports.

The party wants to halve the national deficit, but warns it might also have to raise taxes as a "last resort". It adds, however, that spending must not be cut too early, which could prove a key sticking-point if it is asked to support a minority Tory government's budget plans.

Education

By far the biggest spending commitment is to invest £2.5bn a year on raising standards in schools in poorer areas. The money would be used to cut class sizes, recruit more teachers and boost one-to-one tuition.

University tuition fees would be phased out over six years and the "arbitrary" target of 50 per cent of young people attending university scrapped in favour of vocational training.

Health

Mr Clegg says the suggestion all spending in any department can be ring-fenced is absurd, pointing to economies that can be made in NHS "management costs, bureaucracy and quangos". The money saved would go on frontline care. People would gain the right to register with any GP of their choice.

Green agenda

The Lib Dems promised an immediate one-year "green stimulus plan", creating 100,000 jobs by bringing 250,000 empty homes back into occupation and refurbishing shipyards to make offshore wind turbines.

Foreign/defence

The Lib Dems, who fiercely opposed the Iraq invasion in 2003, have a different view of military action in Afghanistan, describing themselves as "critical supporters" of the mission but raising the prospect of withdrawing troops by 2015.

It rejects the like-for-like replacement of Trident nuclear missile system, arguing that its £100bn cost is unaffordable and rules the purchase of "tranche 3" of Eurofighter jets for the RAF.

The Lib Dems say it is not feasible to join the euro at the moment, but repeat their long-standing promise to join the single currency if the move is approved in a referendum.

Crime/immigration

An extra 3,000 police would be put on the beat, "time-wasting" bureaucracy axed and police authorities given the right to hire and fire chief constables.

In an effort to cut prison numbers, a "presumption" against sentences of under six months would be introduced.

Migrant workers would only be given visas for particular regions of the UK with skill shortages. Illegal immigrants who have been in the country for ten years would be offered the chance to become citizens.

Cleaning up politics

Reform of the way MPs are elected is at the heart of plans for overhauling the "rotten" political system. It would be a key demand in negotiations between the parties in a hung parliament.

The party favours the "single transferable vote" method of proportional representation, but would find common ground with Gordon Brown who has promised a referendum on a switch to the "alternative vote" system.

The Lib Dems would also allow voters to "recall" corrupt MPs requiring them to face a by-election in their constituency.

They would lower the voting age to 16, cap political donations at £10,000 and the House of Lords with a fully-elected second chamber.

Lib-Dem manifestos: A brief history

1997: Make the Difference

Paddy Ashdown, then Lib-Dem leader, described his manifesto as "a menu with prices". It promised to increase the basic rate of income tax by 1p in the £ to 23p, to help finance a £2bn-a-year programme for education, and a new higher rate of tax at 50p in the £ on those earning over £100,000 a year. Local income tax would replace the council tax, but that was a long-term wish, and Mr Ashdown disappointed unilateralists by promising to retain the British nuclear missile system Trident, until it could be negotiated away. The manifesto's unique selling point was constitutional reform, with a pledge to "restore trust" in British politics by introducing proportional representation for all elections, a largely elected House of Lords, a Bill of Rights including gay rights, and fixed-term Parliaments of four years (all of which are now on Labour's agenda).

Verdict 3/5. Nice menu – shame about the prices.

2001: Freedom, Justice, Honesty

Charles Kennedy repeated Paddy Ashdown's taxation gamble when he took over the leadership and launched his party's 2001 general election manifesto. The Lib Dems were the only party promising to put up income tax – an extra 1p on the basic rate, a new 50p in the £ top rate on those earning over £100,000, and changes to Capital Gains Tax. Electoral reform for Westminster elections was the centrepiece but Mr Kennedy said his manifesto's core was a promise of "freedom" from illness, fear, and poverty funded by £9bn in tax increases. It promised more hospital beds, more nurses and doctors, free eye and dental checks, more secondary school teachers and an extra £5 a week on basic state pension. The Lib Dems' green agenda included a commitment to scrap nuclear power and there was a promise to tighten controls on banks.

Verdict 3/5. The voters still could not stomach higher taxes.

2005: The Real Alternative

The 20-page newspaper-style manifesto in 2005 marked a change for the Lib Dems – gone was the iconic 1p increase in the basic rate of tax. But it stuck to the plan for a new 50% top tax rate on earnings over £100,000 and put greater emphasis on replacing council tax with local income tax. Its launch is remembered for a blunder by leader Charles Kennedy over the way the tax increases would impact on taxpayers. He blamed his mistakes on lack of sleep after the birth of his son. Vince Cable, the Treasury spokesman, was not allowed on the platform and stood at the back with his head in his hands.

Verdict 4/5. Toned-down menu spoiled by trip in delivery by Charles Kennedy.

Colin Brown

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