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Local Taxation

Part of the debate – in the House of Commons at 3:32 pm on 4th July 2005.

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Photo of Caroline Spelman Caroline Spelman Shadow Secretary of State (Office of the Deputy Prime Minister) 3:32 pm, 4th July 2005

I would like to make a little progress.

The Liberal Democrats voted in favour of revaluation and rebanding, despite telling people on the doorsteps that they were opposed to both. There is nothing like saying that one is a principled party of opposition—because, let's us face it, such actions are nothing like those of a principled party of opposition. As for the local income tax plan, it was certainly interesting, not least because of the rancour that it has created within the Liberal Democrats. As the Liberal Democrats' president, Simon Hughes, said:

"I don't think in the end it worked well".

What local income tax has in its favour is that it is easy to market, but it is often the case that the devil is in the detail. The campaign pitch is simple enough—the amount of tax that one pays locally is determined by one's level of income. But I think the Liberal Democrats should be had up by the Advertising Standards Authority for their slogan, "Axe the Tax". The Liberal Democrat Treasury spokesman—Dr. Cable—himself admitted that two full-time earners in a house would pay more tax, and said that the tax would bite when a combined salary was between £30,000 and £40,000 a year. A pensioner with savings or investments would be taxed on them, so it is rather disingenuous to suggest, as the Liberal Democrats have, that local income tax is a panacea for pensioners. It certainly is not.