Lib Dems unveil manifesto promising tax cuts

The Liberal Democrats today unveiled their manifesto, promising tax cuts for 15 million families.

The Liberal Democrats today unveiled their manifesto, promising tax cuts for 15 million families.

The party wants to scrap the council tax, and replace it with a local income tax, which it says will make the typical family £450 a year better off.

Returning to the campaign after the birth of his first child, leader Charles Kennedy also promised 21,000 extra teachers, 10,000 more police officers and an extra £100 a month pension for the over 75s.

And he promised just one tax raising measure - a new top rate of income tax of 50p in the £1 on earnings over £100,000, to pay for free personal care for the elderly, the scrapping of tuition fees and to help keep local taxes down.

The 20-page manifesto is entitled The Real Alternative. Mr Kennedy said the Lib Dems were the right option for voters who did not want "the authoritarian instincts of the Labour Government and the insular and narrow-minded instincts of the Conservatives".

He said: "Today the Liberal Democrats are setting out our positive programme for the Government of Britain. It is a programme based on fairness and opportunity, dignity for older people, real opportunity for our children and a fair deal for families. It is a fully costed and affordable programme to create a fairer Britain. The Liberal Democrats are the real alternative at this Election."

Mr Kennedy added: "Over the course of the last parliament the Liberal Democrats have been the real opposition - over issues like Iraq, student top-up fees, the council tax and compulsory ID cards - while the Conservatives have either lined up with Labour or flip-flopped.

"Our manifesto sets out a vision of a Britain with quality local public services - good schools and good hospitals, a strong stable economy, a Britain that celebrates diversity and provides the opportunities for each individual to make the best of their talents, a greener Britain that lives up to its responsibilities to future generations - cleaner energy and less pollution. That is why we have called this manifesto The Real Alternative."

Mr Kennedy said the plans were based on sound costing with "no hidden taxes".

He said under the local income tax plan 99% of people would pay no more but benefit would be for 100% of people.

The Liberal Democrats would also reallocate £5 billion a year of Government spending. They would scrap ID cards and Labour's baby bond to help fund better pensions and extra police and teachers.

Mr Kennedy said: "These are our priorities and I believe they match the priorities of the people of Britain."

Mr Kennedy repeated his opposition to the Iraq war and criticised Tony Blair's relationship with President George Bush.

He said: "We reject a foreign policy placed on 'my ally right or wrong'. And we say that war should always be a last resort.

"Many people will remember the principles and consistent Liberal Democrat opposition to the war in Iraq - representing the views of millions of our fellow citizens. Many people will remember that the Conservatives lined up with Tony Blair and George Bush."

Mr Kennedy called for a "proper exit strategy for British troops".

He said the aim should be a phased withdrawal of British forces at the end of this year when the UN legal mandate expires.

Challenged later on Liberal Democrat immigration and asylum policy, Mr Kennedy said: "We believe that proper, sensibly controlled immigration in our country is something that any Government of the day...should be addressing."

He continued: "How do you do it? In our view, you have an independent body that advises the Government of the day as to the skills shortage in our society and this clearly influences the number of people who are able to come here, live here, work here and contribute to the benefit of our overall society.

"That shouldn't be an issue for politicians, that should be an outside body doing that and advising parliament."

Turning to asylum, the Liberal Democrat leader told reporters: "I have to say to people and I cannot say this strongly enough our country has got a rich history of being welcoming for people from other places in the world who may be feeling personal persecution, because of reasons of civil unrest and so on.

"We should be a welcoming society and our society has been the better precisely because that has been our mindset over many generations."

Mr Kennedy added pointedly: "We are certainly not going to engage in a debate that seeks to turn that back. What we are going to do is make quite clear that our country is the better precisely because it is a multi-ethnic country."

Liberal Democrats propose allowing asylum seekers to work so they do not rely on benefits and want to introduce a quota for immigrant workers outside the European Union.

Lib Dem chairman Matthew Taylor said a couple with a double income would have to be earning £20,000 a year each before their local income tax bill rose compared with current council tax levels.

But he was unable to publish a table of exact amounts payable under the proposed new system.

"What we can't do is give absolutely detailed figures, local authority by local authority," said Mr Taylor.

"There's no means of doing that."

On the proposal to create a 50 per cent tax bracket for people earning more than £100,000 a year, Mr Taylor said: "There is a popular myth in Westminster which probably reflects the salaries MPs and journalists are on.

"The typical income for households is just over £20,000 a year.

"Whilst we understand in the circles that we operate, people think incomes of £100,000-plus are common, I'm afraid that the people who watch your television programmes and read your newspapers are having to struggle in a rather different world."

Leader Mr Kennedy said of the local income tax proposals: "In terms of what people pay, it is based on income - that has to be a fair principle.

"We are fundamentally redressing an injustice in the system."

He said the typical family would find themselves £450 a year better off and six million pensioners would be taken out of local tax altogether.

"If we get that message across over the next three weeks, that will prove to be a popular policy and also a principled one," he said.

"The Labour and Conservative parties are the parties of the status quo as far as the council tax is concerned.

"Another party, the Liberal Democrats, say that you can't just put a bandage on the wound."

He insisted that the council tax abolition proposals would not lead to tax rises and that his manifesto commitment to "only one tax increase" was correct.

"That is it - full stop," said Mr Kennedy. "I don't accept this allegation... that we're slapping extra taxes on people.

"We're simply applying a system of local taxation based on people's income."

Mr Taylor insisted that the party was "going to the nth degree" to explain their taxation proposals and that their website featured a calculator allowing people to discover their new tax burden under the proposed system.

Mr Kennedy said: "The issue for us as a party, as Liberal Democrats, is, by definition, that there are millions of people in this country who at the last Election and the Election before that did not vote Liberal Democrat."

He added: "I do not think it is a major issue whether somebody may have voted for Tony Blair or Labour in years gone by or may have voted for Conservatives.

"What we want them to do is take a fresh look at us as a political party and take a fresh look at British politics."

Mr Kennedy ended: "I do not think that past allegiance is anything to go by. This Election is a much more mixed picture then the recent ones that many of us here have been involved in."