Lib Dems say: "Don't delay - families need help now." (Wantage and Didcot Liberal Democrats)

Lib Dems say: "Don't delay - families need help now."

November 16, 2008 4:18 PM

Lib Dem Shadow Chancellor Dr Vince Cable MP (left) with Wantage and Didcot spokesman Alan Armitage

Lib Dem Shadow Chancellor Dr Vince Cable (left) with Wantage and Didcot spokesman Alan Armitage

When the Liberal Democrats initiated a debate on the economy in the House of Commons in April, warnings of a recession were brushed aside rudely by government ministers, who described Vince Cable's analysis as "lurid fiction" and "hysterical". Today, those same ministers are planning to raise government borrowings to levels which will triumphantly break their own fiscal rules, saddling the country with a huge debt which will take us years to pay off.

The Conservative's Shadow Chancellor George Osborne is right to question the government's strategy to borrow its way out of recession, and Labour looks hypocritical claiming to be shocked and bewildered at his behaviour. But the Conservative's own "strategy" is shallow beyond belief, and even the Party's own activists are reported (in the Sunday Times today) as saying that "it is extremely hard to find anyone in the City who takes Osborne seriously".

As Lib Dem Leader Nick Clegg said in a recent speech to the Royal Commonwealth Society in London, "The Conservatives want to freeze a bit of Council Tax and defer a bit of Corporation Tax - but not put a penny in the pocket of ordinary families. This does not come close to what's needed."

The Liberal Democrat proposals for tax cuts, balanced by cuts in government expenditure and higher taxes for the very well off, were worked out carefully some time ago. In particular, Lib Dem shadow chancellor Dr Vince Cable has been warning for years that the level of personal debt threatened the economy, and that house prices were unsustainably high.

Families are facing a difficult winter. Rising mortgage bills, the fear of unemployment and high heating costs mean that the shockwaves of the financial crisis are being felt in households across Britain. When the banks were in trouble, they were rescued. Millions of families who are finding themselves in trouble must be helped too.

People on low and middle incomes need real, lasting, significant tax cuts now. Only the Liberal Democrats are advocating a 4p cut in the basic rate which will put money back in the pockets of those who need it the most.

The Lib Dem proposals are affordable and costed - and they would help boost consumer spending in the economy, as well as helping struggling families. They would also act to lower energy bills so that people can afford to keep warm this winter. And we would ensure that banks only ever repossess people's homes as a last resort.

If Labour brings in tax cuts they will be here today, gone tomorrow. We will all pay for them in the end.

The Tories still think millionaires are the priority when it comes to tax breaks, not the low and middle-income families who need help now.

The Liberal Democrats first launched plans to cut the basic rate of income tax by 4p in the pound in July 2007. The measure is part of a comprehensive tax package, aimed at re-balancing the tax system in favour of low and middle-income earners. The tax cut is fully funded and would be paid for through green taxation and by closing tax loopholes for the very wealthy including:

· Taxing capital gains at the same level as income tax

· Clamping down on tax avoidance in areas such as stamp duty

· Ending upper rate tax relief on pensions

These proposals would not increase the government fiscal deficit; that means they are affordable now. This tax cut is now urgent to get money to people who are struggling the most, helping them to pay for essentials and stimulating spending on the high street.

In addition to this we would identify £20bn of wasteful or ineffective public spending, for example abolishing programs such as the child trust fund, child tax credits for higher earners and ID cards. The majority of this money will be redirected to Liberal Democrat spending priorities with the remainder being used to cut the overall burden of taxation, reducing taxes further for people on low and middle incomes.

Wantage and Didcot Liberal Democrats