No 50p tax rate, but a pension raid instead. Check it out:
(Daily Mail Via Thomson Dialog NewsEdge) SIR Menzies Campbell saw off a rebellion from MPs at his first party conference as leader yesterday and dropped plans to hit high earners with a 50p top rate of tax.
But in its place was a package of proposals which would eat into the pensions, assets and holidays of the middle classes.
Senior party figures said the plans were designed as a 'tax hike for the rich'. Even Sir Menzies admitted: 'We are not penalising ambition or achievement, we are penalising wealth.' In a move which would raise GBP 10billion, tax relief on pensions for higher earners would be slashed - leaving someone on GBP60,000 a year with GBP1,000 less annually in their pension pot. Meanwhile, higher levies would be imposed on the sale of second homes and shareholdings.
A further GBP8billion would be raised from 'green taxes' to encourage environmentallyfriendly behaviour - including GBP2,000 car tax for 4x4s and GBP1,500 for family vehicles, and new levies on aviation which would signal an end to cheap flights.
The GBP18billion raised would be spent on removing income tax for the lowest earners, slashing 2p off the basic rate and raising the higher rate threshold to GBP50,000.
Sir Menzies insisted that the new tax plans would see only the top ten per cent of earners worse off. But the Institute for Fiscal Studies said this would include a couple with two children on a combined after-tax income of GBP53,400.
And experts pointed out that if the green taxes changed people's behaviour, there would eventually be less revenue - creating a 'black hole' in the nation's finances.
Treasury spokesman Vince Cable said voters had to accept 'policies that hurt' if they were to prove themselves serious about tackling climate change.
He added: 'We have now got a very good radical tax package, tax cutting for millions of people, a great commitment to a green switching tax, taxing the very wealthy.' Sir Menzies had faced the first major challenge to his leadership when a dozen MPs and peers staged a revolt against abandoning the 50p top rate policy.
But to widespread relief in the Campbell camp, mutiny was snubbed by a wide margin of activists.
Frontbencher Evan Harris, who led the rebellion, told delegates to applause: 'I support-Ming Campbell, we all do, but this is not just his party it's yours.' Malcolm Bruce, MP for Gordon in the Scottish Borders, said scrapping the 50p rate left the party 'in danger of undermining what we have been saying for the last two decades'.
Matthew Elliott, chief executive of the Taxpayers' Alliance, said: 'The LibDems are right to axe the commitment to a 50p top rate of tax and they are right to call for tax thresholds to be raised. Both of these will be popular moves.
'But it's a real shame they are undoing the good work by committing to a massive increase in green taxes which will hit huge numbers of ordinary families across the country.' Shadow Local Government Minister Eric Pickles said: 'Whatever they claim and whatever they say, Liberal Democrat plans mean just one thing - higher taxes.
'They want to shift the tax burden on to everyday families and working couples, by hiking rates of income tax. They fail to understand that raiding Britain's pay packets each month punish hard work and enterprise.'
POLITICAL gossip websites were rife with speculation last night after LibDem MP Lembit Opik told a radio interviewer that politicians have a right to secrets. In the 'honesty booth' feature on Victoria Derbyshire's Radio 5 Live show, he was asked: 'Does that mean you have a personal secret that you are hiding from the electorate?' He replied: 'We have the right to not expect the media to always poke around in them (secrets).' Mr Opik who is engaged to weather presenter Sian Lloyd, said he had complained to the BBC about the line of questioning.
Copyright 2006 Daily Mail. Source: Financial Times Information Limited - Europe Intelligence Wire.
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