Liberal Democrats launch their Alternative Budget

4.00.00pm GMT Mon 28th Feb 2005

Today at the launch of the Liberal Democrat Alternative Budget, Liberal Democrat Leader, Charles Kennedy MP and Liberal Democrat Shadow Chancellor, Dr Vince Cable MP, emphasised the need for fairer taxation and tough choices in public spending. The Alternative Budget also includes the party's plans for higher pensions, extra police, smaller class sizes, a Maternity Income Guarantee, scrapping tuition fees, scrapping council tax and free personal care.

Mr Kennedy said "When it comes to electoral success economic credibility is crucial. Which is why the Conservatives are still unelectable. I am determined that, at the General Election, we will maintain the reputation for economic integrity that we have built up over this Parliament."

Mr. Kennedy further said "We have a reputation for being straight forward on tax. That will not change. But the difference between the parties on tax take is minimal. The real issue will be one of principle and of priority. In principle it is important that the tax burden does not fall disproportionately on the poor and vulnerable. We also believe that the priorities we are setting out for spending taxpayer's money are the priorities of the British people. If Labour are true to form, they will duck the issue of taxation. They will spin and obfuscate. They will rule some things out but be coy about what they actually plan to do.

Mr. Kennedy concluded by saying "The Liberal Democrats have been the real opposition to the Government in this Parliament. At this General Election we will be the real alternative to the Government."

On the Liberal Democrat plans, Dr Cable said "Economic discipline and credibility are essential. But we intend to balance these economic imperatives with greater fairness. Our commitment to fairness is reinforced by a firm commitment to liberal economic policies: economic freedom. Without wealth creation there is no wealth to spread. We have identified over five billion pounds a year where low priority spending can be reallocated to our priority areas such as pensions, policing, health and education."

Dr Cable also highlighted the importance of establishing a fairer tax system. Dr Cable said "Our tax system currently reinforces rather than mitigates inequality. The poorest 20% pay a higher percentage of their income in tax than the top 20%. People don't want to pay more tax but they want it distributed more fairly. That is why we advocate scrapping Council Tax and replacing it with Local Income Tax (LIT). The majority of households will benefit or face no change under our system. Families on average income will benefit by over £450. That is also why we are lifting over 400,000 home-buyers, largely first time buyers, out of paying Stamp Duty. To enable us to abolish tuition fees and top-up fees, introduce free personal care for the elderly and cut local taxation we have also proposed a 50% tax ceiling on every pound earned over £100,000."