Kennedy: 'Axe the tax'

The introduction of local income tax will put an end to the "the most unpopular tax in Britain", the Liberal Democrats have said.

At a press conference on Wednesday, party leader Charles Kennedy renewed the Lib Dem focus on proposals to scrap the current council tax system in favour of a local income tax.

Kennedy described the council tax as "the most unpopular tax in Britain today".

"We believe tax should be based on the longstanding principle of people's ability to pay. The council tax penalises pensioners and low income families," he said.

"Under our plans for a local income tax at an average of 3.75 per cent, 15 million families in this country will pay less. Six million pensioners would pay no local tax at all.

"If a working couple are paying the average Band D council tax of £1,214, their income would need to be over £42,000 before they would even begin to pay a penny more."

Rises

Lib Dem strategists believe the proposals are one of the party's strongest electoral cards, although attention has begun to focus in recent days on how many households would face tax rises under the plans.

The Lib Dems concede that a quarter of the population would pay more, but say 50 per cent would pay less and a further quarter would be unaffected.

"Let me be clear about this," Kennedy said.

"There will not be a council in the country where more will be raised under local income tax than under the existing council tax.

"In fact, local income tax would be lower overall than council tax.

"That's why we're devoting over £2bn a year from the proceeds of our new top rate of tax to hold down those local taxes."

Incomes

Both Labour and the Conservatives say the 'axe the tax' campaign will peter out as it becomes apparent that two people earning little more than the average income will pay more.

But the Lib Dems poured scorn on the other parties' figures, claiming that they are "out of touch" with the reality of people's incomes.

Local government spokesman Ed Davey said that 92 per cent of the population are below the Conservatives' figures for 'average earnings', while 83 per cent are below Labour's average.

"If you want the real average earnings, that is £23,000, use the figures from the independent Institute of Fiscal Studies, as we have done," he said.

"The danger if Labour or the Conservatives get elected is the danger of revaluation.

"If the experience in Wales this year is repeated in England, over seven million households will face higher bills."

And Kennedy said that only the Liberal Democrats are proposing "a fair and permanent solution to this problem".

"Our message is clear - if you want, once and for all, an end to the unfair council tax, the Liberal Democrats self-evidently are the real alternative," he said.