Campbell launches green taxation offensive

Sir Menzies Campbell made the environment the Liberal Democrats' biggest ever single-issue campaign yesterday as he put the battle over the party's commitment to a dramatic shift towards "green" taxation at the heart of his struggle with Labour and the Conservatives.

He launched a nationwide grassroots drive to highlight the party's commitment to tackling global warming and insisted he would win a conference debate over proposals to shift the burden of taxation from income tax to environmental charges.

Under tax plans to be debated by the party's conference, environmental taxes would rise by £8bn a year to fund significant cuts in income tax for millions of families. Proposals include a sharp increase in the tax on aviation as well as sharp increases in car tax on the most polluting vehicles that would impose a £2,000 a year charge on new "Chelsea tractors" and an eight-fold increase in car tax on some family saloons.

But Sir Menzies faced a rebellion by at least six of the party's MPs who were said to be supporting a challenge to his decision to drop the party's "totemic" commitment to a 50p top rateof tax on earnings of more than £150,000 a year.

Evan Harris, the party's science spokesman, said he had the backing of Sandra Gidley, John Leech, Norman Baker, Mike Hancock and Phil Willis. He said: "More and more people now recognise that the 50p top rate amendment makes the tax package even fairer, makes our intentions much clearer and builds on the proposals rather than simply harking back to our 2005 manifesto policy."

Sir Menzies is also facing a second challenge from some rank-and-file activists who are attempting to drop the party's new guarantee that all tax rises will be matched by cuts.

One source said the amendments proposed by activists in Canterbury would "drive a coach and horses" through the proposals from the party's tax commission.

Yesterday, Sir Menzies attempted to play down the significance of the tax debate, insisting that it "is not High Noon".

Vince Cable, the Treasury spokesman, said he was "confident" the tax policy would be adopted by delegates but warned a defeat would leave the leadership "facing some difficulty because our recommendations have not been accepted."

Party sources denied reports claiming they were planning a new 1 per cent tax on property values but acknowledged they were still looking at the potential for future property taxes, despite their proposal to replace the council tax with a local income tax.

Addressing a rally of party activists last night, Sir Menzies declared that the party's environmental tax policies were "the most radical ever from any major UK political party".

Party sources said they were planning a grassroots campaign in local constituencies to put across the green credentials the party high command believe will be vital in dealing with the challenge posed by the resurgent Conservative party. Leaflets will encourage voters to switch to "green" energy suppliers and emphasise that the party wants to reward people who "do their bit" for the environment.

Sir Menzies insisted: "It will change polluters' behaviour and help in the battle to safeguard our planet. It will also shift the tax burden from hard-working people and on to the polluter."

He said Gordon Brown had presided over an increase in carbon dioxide emissions and a fall in the proportion of environmental taxation.David Cameron had made "all the right noises, but none of the right moves" on green issues.