Kennedy: We'll let the public vote on spending plans

The Liberal Democrats will fight the next election with a pledge to offer the public the chance to vote every year on how their taxes should be spent.

The Liberal Democrats will fight the next election with a pledge to offer the public the chance to vote every year on how their taxes should be spent.

Charles Kennedy gave the first hint of the radical plans as he rounded off his party's conference in Bournemouth yesterday with an impassioned speech designed to appeal to disaffected Tory and Labour voters.

Under proposals being drawn up by Mr Kennedy for the manifesto next year, the public would be allowed to tick a box on a returnable slip accompanying their annual P60 tax certificate, to indicate their spending priorities.

Oneper cent of taxation, equivalent to £3bn, would be set aside, and taxpayers would be asked on the forms how it should be divided between health, education, pensions and transport. Respondents could also indicate what other areas they would like to see receive extra spending.

In his keynote speech, the Liberal Democrat leader told delegates to go out and stress the difference between their party and the "disaster" of William Hague's Tories and the "disappointment" of Labour.

Buoyed by higher poll ratings and what he described as one of the most successful conferences in his party's history, he received a five-minute standing ovation as he went on a walkabout among the audience after the speech. The 31-minute speech was delivered with considerably more passion than his widely criticised debut as leader last year.

Mr Kennedy said that the petrol crisis had proved the urgent need to reconnect politics to the people. "Politics is about leading. But politics is also about listening. The events of the past 10 days have demonstrated graphically that the current government neither leads nor listens enough," he said. "So it's not just that people are estranged from politics. It's that politicians are estranged from people. I know that, you know that, the country knows that."

The Liberal Democrats would attempt to reconnect politics with voters by campaigning on a platform of greater freedom from the state, including freedom to choose where their taxes went.

"We will let people, not politicians, decide how some of their tax revenues are spent. Every party taxes and spends, but our priorities are the people's priorities," he said. "We've shown that the others are now the old parties of the 20th century. We are the party of the 21st. Let us connect with the people and the people will connect with us."

The manifesto would also include sections in every chapter detailing how they would reduce government interference in ordinary people's lives, he told delegates. These would include a range of regulations that burden small businesses, and bureaucracy in schools.

Holding up a copy of his pre-manifesto document Freedom in a Liberal Society, Mr Kennedy told delegates: "Our purpose is here in this document. It's the F-word. Freedom. That's why we're in politics."

In his most passionate speech since he succeeded Sir Paddy Ashdown as leader, Mr Kennedy attacked Labour's "poverty of ambition", claiming that it had behaved timidly in office despite its huge parliamentary majority.

Only the Liberal Democrats offered a progressive alternative on law and order, on supporting British membership of the euro, and on the environment, he said. He also stressed that they would fight the next election as the only party of "honest taxation", paying for better schools with a penny on income tax, and higher pensions with a 50p tax rate on incomes over £100,000.

"Where there is a cost, we say how we will pay for it. What you see is what you get. This is what we will deliver," he said.

He reiterated key election promises to increase numbers of doctors and nurses, abolish prescription charges and cut primary-school class sizes. One of the biggest cheers came when he promised to abolish tuition fees for university students. He pledged "fair and decent pensions" - a £5 weekly rise above inflation, with £10 for those over 75 and £15 for those over 80 - a clean environment, and a commitment to civil liberties.

On the fuel crisis, he repeated the party line that taxes on petrol and diesel should be used to fund green policies. But with the issue dominating the headlines, he did not respond to the call by the shadow Chancellor, Michael Portillo, to cut duty on fuel.

On issues such as crime, Mr Kennedy said that both Labour and the Tories were "competing in a dismal Dutch auction" as they practised "the lowest common denominator politics".

Mr Kennedy reserved his most savage criticism for the Tories, dubbing Mr Hague "the first unpopular populist" for his repeated attacks on asylum-seekers and Europe. "He's desperate for a headline, desperate for a quote, desperate to get attention. William Hague is not a serious leader of a serious political party. That's the serious point," he said.

Mr Kennedy said that the Liberal Democrats offered a home for Tories who were repelled by Mr Hague's hardline stance on Europe and asylum.

But supporters of electoral reform were disappointed that he failed to make any reference in his speech to the issue.