Lib Dems offer voters a straight choice on tax

Charles Kennedy unveiled the Liberal Democrat draft manifesto for the next general election yesterday, with radical plans to improve pensions and public services by putting up taxes for higher earners.

Charles Kennedy unveiled the Liberal Democrat draft manifesto for the next general election yesterday, with radical plans to improve pensions and public services by putting up taxes for higher earners.

The party leader pledged to wage a war on poverty as he set out an agenda designed to give a progressive alternative to Labour and the Tories.

The Liberal Democrats, with plans to increase the overall tax burden by some £8bn over five years, will enter the next election as the only party supporting tax rises.

Mr Kennedy was immediately accused by Labour and the Tories of advocating "tax and spend" policies, but he insisted that his proposals had been costed and were realistic and said it was time to give voters an honest choice on tax at the election.

A new 50 per cent tax rate payable on all income above £100,000 a year would be used to increase pensions by £5 a week for all retired people, £10 a week for the over-75s, and £15 a week for the over-80s.

In a further move to help low earners, the party would reduce the 10p in the pound rate of income tax to a zero rate, freeing about 1.4 million people on low incomes from paying tax altogether.

To tackle child poverty there would be an increase in benefit for a family's youngest child aged under five, paid for by taxing child benefit at the marginal rate for the highest earner in households with one or more upper-rate taxpayers.

Mr Kennedy, unveiling the draft manifesto at Westminster, denied he was shifting the Liberal Democrats to the left of Labour but accepted it was more "progressive". He said: "We have no interest or ambition to see ourselves as somehow to the left of Labour. That's the politics of the cul-de-sac."

However, he said tax and spending would be the main battleground at the election and the electorate should be told "you can't get something for nothing".

Taxes for anyone earning more than £21,000 would go up under the worst-case scenario outlined by the draft manifesto, with those earning £35,000 a year facing a £2.25 per week increase in taxes.

Despite claims that Tory voters in the south of the country would be put off by such plans, Mr Kennedy said he believed voters would back the move. "You can win legitimacy if you are honest with people. We are talking about modest increases, but we are actually specifying what those increases are going to achieve."

Andrew Smith, Chief Secretary to the Treasury, described the draft manifesto as a "menu without prices", adding that it "presents a litany of further uncosted proposals, but does absolutely nothing to address the confusion at the heart of their tax and spending plans. The simple truth is that the Liberal Democrats' sums just don't add up."

Tim Collins, senior Tory vice-chairman, said that Mr Kennedy was "peddling Lib Dem lunacy" with plans to increase the tax burden. "All the Liberal Democrats have told us in their pre-manifesto document is that they are determined to increase taxes and scrap the pound. The mainstream majority in Britain will see straight through these ridiculous proposals."

Mr Kennedy rejected the attacks and was upbeat about his party's prospects, pointing to this year's by-election victory over the Tories in Romsey. "The next election will be the first election when the wasted-vote argument cannot be run. When we can hold Bermondsey [a Labour target] and win Romsey, there are no no-go areas for us at the next election."

His party's plans had been costed and could be met out of the tax increases proposed and the savings made in the system. Mr Kennedy said recent Tory remarks on asylum-seekers, immigration and English tests for foreign doctors proved the need to offer a platform promoting civil liberties. He said the Tory agenda "will appeal to the Alf Garnetts of this world and the Alf Garnetts are unlikely to be voting Liberal Democrat in the first place".