Kennedy prepares to ditch vote-losing tax policies

Charles Kennedy has announced a wholesale review of the Liberal Democrats' policies that could pave the way for them to ditch their tax policies.

Charles Kennedy has announced a wholesale review of the Liberal Democrats' policies that could pave the way for them to ditch their tax policies.

The party fears it lost support because of its plans to replace the council tax with a local income tax, worrying people on middle-range incomes, and its call for a 50p top rate of tax on incomes of more than £100,000 a year.

Some Liberal Democrat MPs believe the platform allowed the Tories to brand it a "high tax" party in seats where the two parties did battle. In last week's election, Mr Kennedy's party performed much better in close contests against Labour than against Tories, and some MPs are warning there is "no future" for the Liberal Democrats as a left-wing alternative to Labour.

The policy review will also focus on Europe and energy. The party may drop its opposition to nuclear power amid evidence that it could provide a way to combat climate change.

Mr Kennedy called for a more "flexible" policy-making process that is bound to provoke resistance from some activists, who will see it as a Blair-style "top down" modernisation.

Athough he promised not to "discard" a system that offered all members a real chance to participate in policy-making, he added: "We must reconsider whether it should be possible to commit the party to specific and often controversial policies on the basis of a brief, desultory debate in a largely empty hall"

Addressing his MPs, Mr Kennedy also proposed a new approach to policy under which the party would start with a "clean sheet" after each election. The aim is to stop its opponents portraying old policies as current ones.

Mr Kennedy claimed his party had "come of age" at the election and emerged as the "real alternative" to Labour but conceded it had to learn lessons from its failure to make a bigger breakthrough. He said: "If, as a party, we are to take on and beat our principal opponents in full-scale battle - rather than being a brilliant guerrilla force pulling off spectacular individual victories - we have to raise our game across the board."

He added: "We need more resources and we have to look at more effective ways of raising them. We have to examine ways in which we can better communicate our message at national, regional and local level."

Mr Kennedy will discuss reforms with the party's federal policy committee and hopes to secure agreement on a new procedure at its autumn conference.

On the election, Mr Kennedy said that, for every eight votes lost by Labour, the Liberal Democrats gained seven and the Tories only one. The Liberal Democrats had moved into second place in 187 seats, including 104 held by Labour. "The political momentum is with the Liberal Democrats. Between us, we must now build on this momentum," he said. " My aim as leader of the Liberal Democrats is to put the party in a position to challenge for power at the next election."

Mr Kennedy said: "All too often politicians are fighting yesterday's battles on the basis of an outdated view of how society operates. I shall look in particular to some of our newer and younger Parliamentary colleagues to ensure that we do not fall into that trap.

"Pensions policy, local government finance, Europe, energy and the environment will all play a much more central part of our deliberations over the next four years."

¿ Jim Wallace, Scotland's Deputy First Minister and leader of the Scottish Liberal Democrats, is to "move on" from political life. He will stand down as deputy to Jack McConnell, as party leader and as a member of the Scottish Parliament.