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Local Taxation

Part of the debate – in the House of Commons at 5:17 pm on 4th July 2005.

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Photo of Andrew Turner Andrew Turner Shadow Minister (Cabinet Office) 5:17 pm, 4th July 2005

It is a pleasure to follow Mr. Raynsford, to whom I shall refer later on, if I may. I do not usually begin a speech by disagreeing with my own Front Benchers, and I do not intend to do so today. However, I should point out to my hon. Friend Mrs. Spelman—she is no longer in her place—who said that 76 per cent. of people blame the national Government for the level of local taxation, that although that is doubtless true nationally, on the Isle of Wight it is not. There, it is the Liberal Democrats who are blamed for the level of local taxation. The people of the Isle of Wight understand that if one spends more, one has to tax more. The Liberal Democrats do not seem to have understood that point in proposing their panacea of local income tax as an alternative to council tax.

The Liberal Democrats do not seem to understand that shifting the taxation burden from a ratio of 30:70 to 70:30, as Sarah Teather suggested—she is also no longer in her place—would place an additional burden on the taxpayer. Such a proposal would be particularly burdensome in areas of low income such as my constituency, which has one of the lowest average income levels in the country and a very small number of higher-rate taxpayers. In other words, it has very few people who could afford to pay the level of tax that translating from the Isle of Wight's council tax to a local income tax would involve. As a result, the rate of tax would have to be pushed up. Nothing that I have heard so far from the Liberal Democrats during this debate has explained how they intend to help people in areas of relatively low income.