In a keynote speech to the Liberal Democrat Eastern Region Conference in Mildenhall, Suffolk, today, Liberal Democrat Leader Ming Campbell said:

“For all their mock outrage the Labour Party and the Tories remain close - far too close - on so many of the problems facing our country today.

“Council tax is a prime example.

“At this week’s Prime Minister’s Questions, Mr Brown and Mr Cameron bellowed over who got there first on proposed changes to inheritance tax. But it fell to me - to the Liberal Democrats - to raise the issue of council tax.

“Council tax - the most underhand, unwanted, and unfair tax in Britain today. Thanks to this week’s spending review, funding for councils will now rise by just one percent.

“One percent - when paying for adult social care is rising by eight to fifteen percent each year. One percent - when it’s clear that this will force council taxes ever higher. And one percent - when we know - we know - that millions of pensioners and lower income families will struggle to pay higher tax bills.

“Council tax will rise by at least 5% next year alone. And by 2011 it will have risen by more than 120% since Labour came to power.

“Hitting hardest those who have least. It is high time we moved to fair local taxation based on the ability to pay.

“Let me make this prediction. At the next election, the unfairness of Britain’s council tax will be clearer than ever before.

“Our opponents will ignore it. They will pretend it doesn’t matter: but they do so at their peril. Because people are not stupid.

“Council tax is rising steadily to the top of the political debate. And without reform, Prime Minister, the council tax will be your poll tax.”

Ahead of the Chancellor’s statement on the Pre-Budget Report and Comprehensive Spending Review, Liberal Democrat Leader Ming Campbell called on Gordon Brown to take responsibility for the turmoil in the economy.

Ming accused Gordon Brown of going to ground while his Chancellor tries to steer his way through the stormy economic waters of the Prime Minister’s making.

He said:

“Gordon Brown must stand up and take responsibility for creating an economic outlook full of uncertainty and instability.

“As Chancellor, Gordon Brown happily lauded his own economic wizardry, but failed even to recognise the growing problems of personal debt. Personal debt now stands at £1.3 trillion and households now have to set aside about a fifth of their income to service existing debt, two fifths for first time buyers.

“Every day nearly 300 people face insolvency and 75 family homes are repossessed. All the indications are that the problems could get much worse. This is a problem of the Prime Minister’s making and he must take personal responsibility for it.”

Ming Campbell attacked the Prime Minister for creating a situation in which he offered tax breaks for the wealthy while increasing taxes for those on lower and middle incomes. He said:

“Since Labour came to power the gap between rich and poor has increased and social mobility has declined.

“We want to see a cut in national income tax by 4p funded by environmental taxes and taxes on the wealthy.

“Council tax in particular places an unfair burden on pensioners and the low paid, it is likely that by 2011 average council tax bills will have increased by 120% since Labour came to power. It is high time we moved to local taxation based on the ability to pay.

“The majority of people feel overtaxed, it is now time to cut taxation for low and middle income groups to make work pay and ensure that the super-rich pay their fair share.”

Concluding Ming said:

“The UK is now in a situation in which there is likely to be a painful economic slowdown and a housing market correction, given difficulty in servicing high levels of consumer debt, a lack of confidence in the banking system and unfairness in the tax system. Gordon Brown must take personal responsibility for this.”

In today’s webcast from the Liberal Democrats’ conference in Brighton, Ming talks about today’s debate on taxation and the party’s proposals to switch the burden of taxation from national income tax to charges on pollution.

Radical tax plans that will take the basic rate of income tax to its lowest level since 1916 were unveiled today by the Liberal Democrats.

The move to cut the basic rate by four pence in the pound will reduce the basic rate of income tax to 16p, benefiting millions of people on low and middle incomes.

The plans are a development of those approved by the party conference last year and form part of the party’s proposals to lift the tax burden on low and middle income earners whilst making the rich and people with environmentally damaging lifestyles pay a fairer share.

The revised proposals are tax neutral and have been independently evaluated by the IFS.

The proposals launched in the document Reducing the Burden: Policies for tax reform include:

• Reaffirming the commitment to abolishing Council Tax, replacing it with a tax based on ability to pay
• Removing tax loop-holes exploited by the super-rich
• Radically simplifying the tax code, removing over 500 pages of unnecessary regulations
• Reforming stamp duty to reduce the amount of tax paid on properties worth less than £500,000
• Reforming Inheritance Tax, with the aim of raising the starting threshold to £500,000

Commenting, Liberal Democrat Leader Ming Campbell said:

“Our new proposals will put fairness at the heart of the tax system.

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Raising the issue of chaos in the tax credit system, Liberal Democrat Leader Menzies Campbell asked the Prime Minister today why the Government had failed to implement the recommendations put forward by the parliamentary ombudsman in June 2005 and why, in the meantime, it has been chasing thousands of poor families through the court system.
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