Response by Lee Glendon to Matthew Elliott, Taxpayers' Alliance

12.00.00pm BST (GMT +0100) Thu 7th Apr 2005

I've read the "Bumper Book 2005" by the Tax Payers Alliance and was pleased to see a number of Lib Dem pledges to cut government spending included already such as the plan to scrap the DTI. As you know we've already identified a number of other areas for cost savings including ID cards, Gordon Brown's Child Trust Fund and the abolition of the Council Tax - overall we have identified £25BN of spending cuts over 5 years to fund our spending commitments of £22BN. You might also be interested to note that Lib Dem MEPS are against the monthly ritual of moving everyone from Brussels to Strasbourg - an appalling waste of money.

Clearly one of our biggest tax changes proposed is to scrap the Council Tax as the Isitfair campaign is also seeking and we would replace this with a Local Income Tax - this would be a significant tax cut for households on low to middle incomes and the typical household would save £450 a year. The overall tax take would be unchanged. Lib Dems are very concerned that the current tax system means that those on lowest incomes are paying proportionately more of their income in tax (across income, consumption and council tax) than those on higher incomes and we want to see a fairer system. The government's tax credit system means that those on low incomes face marginal tax rates of 50% or 60%. Vince Cable MP has already articulated a long term vision whereby those on the equivalent annual income of the national minimum wage are taken out of paying income tax altogether.

Having said this I cannot sign the tax pledge* as we are promising to introduce an additional marginal tax rate of 50p (49p + NI @1%) on individual earnings greater than £100,000, which will affect the top 1% of income earners in our country, in order to fund specific spending commitments of scrapping tuition and top up fees for students, introducing free personal care for the elderly and to reduce the burden of local taxes.

• Pledge: "I pledge to the taxpayers of my constituency and to the British public that, if elected to the next parliament and except in the event of a national emergency, I will vote against all increases in tax rates unless accompanied by an equal or greater reduction in the overall tax burden within the same proposals."