Chancellor Gordon Brown should cut national income tax, funded by rises in green taxes, when he delivers his Budget on March 21st, says John Hemming MP

9.57.01pm GMT Mon 19th Mar 2007

Gordon Brown should use next week's Budget, which will probably be his last as Chancellor, to make the tax system fairer and deliver tax cuts for hard working local people.

"He should cut tax on the things we want more of, like hard work, and pay for it by putting tax up on polluting activities.

"This is what the Liberal Democrats are calling for. Without raising the overall amount of tax raised, the 'green tax switch' we propose would deliver lower tax bills for most households in Birmingham, as well as tackling inequality and environmental damage

Proposals put forward by the Liberal Democrats would -

· Save a typical pensioner couple around £1,600 a year through proposals including scrapping council tax1

· Save a typical double-earning couple around £1,500 a year through measures including a 2p cut in the basic rate of income tax2

· Lift more than two million people on low income out of income tax completely across Britain by reducing the 10p tax rate to zero

· Take 1.3 million people out of the top rate of income tax by raising the threshold to £50,000 p.a.

John Hemming MP added:

"The current system of taxation is not fair. The poorest 20% of households pay a bigger share of their income in tax than the richest 20%. Wealth inequality has actually risen since Labour came to power.

"These Liberal Democrat proposals will make the tax system fairer for those on low and middle incomes. This will particularly benefit pensioners, key public sector workers and young professionals.

"These tax cuts for the majority will be paid for by the wealthy and those with environmentally damaging lifestyles.

"It's time for Brown to go green. And by doing so he can cut income tax bills for hard-working people here in Birmingham."