Lib Dems propose lowest rate of income tax since last Liberal government

by Stephen Tall on July 12, 2007

Ming Campbell has today announced the Lib Dems would cut income tax by 4p in the pound, to 16p, the lowest rate of income tax since the 1916 Asquith government.

The full party press release – with further details of the proposals, and comments from both Ming and Lib Dem shadow Chancellor Vince Cable – is on Ming’s website here.

In his analysis of the announcement, the BBC’s Nick Assinder concludes (albeit, in typically tired left-right terms):

… what the Lib Dem policy offers is a genuine shift in the basis of taxation which will create many more winners than losers. The party is certainly not attempting to disguise the shift, instead making a virtue of the “hit the rich” proposals.

In doing so they are seeking to punch right and left – appealing to old Labour sensibilities and also to the aspirational Tory voter longing to see the promise of a clear cut in their tax bills.

The test of that may not just be in the ballot box at the next election, however. It may be to what extent the other parties decide to cannibalise the package.

And, via Jonathan Calder, we discover The Sun is rather impressed by Cable’s package:

The Liberal Democrats promised a 4p reduction in the basic rate of income tax today. And the cut would be paid for by hits on the super-rich and the biggest polluters.

The £19.2billion tax cut would reduce the rate to 16p – the lowest since 1916 when Britain’s last Liberal Prime Minister was in 10 Downing Street.

Party leader Sir Menzies Campbell said his proposed system was “fair, simple and green” and would benefit “the vast majority” of families.