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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 thank my hon. Friend for that intervention. He accurately points out that such a measure is redistributive. It is very attractive to a party that calls itself new Labour, but which is at its heart still socialist. I understand where it is coming from.

Permit me to give an overview of the impact of local income tax on a typical community. A pensioner with savings and investments would be taxed. A young person who is sharing a flat or in part-time work as a student would be taxed. A young family with a dual income and a mortgage, trying to make their way, would be taxed to the hilt. On top of all that, a local income tax would co-exist with a whole raft of other taxes, including regional income taxes to fund the network of unelected and undemocratic regional assemblies that have leached power away from local communities.

Presumably, the Liberal Democrats support London Mayor Ken Livingstone in his quest to introduce a London-wide regional income tax. As the Association of London Government has recently observed, this could mean up to 6 per cent. on the basic rate of income tax for Londoners.