Brown's Budget Sting - Taxing the Poor to Reward the Wealthy

5.30.00pm UTC (GMT +0000) Wed 21st Mar 2007

Today's budget is likely to be Gordon Brown's last

A Liberal Democrat response to today's budget by Sir Menzies Campbell, leader of the Liberal Democrats

This is the second time that I have responded to the Chancellor's budget.

Gordon Brown is a master at making eye catching spending commitments which then

have a severe sting in the tail. This year's budget was no different.

The headline that Gordon Brown wants in tomorrow's papers is his two pence cut

in the basic rate of income tax. Yet in his statement he failed to mention that

the income tax changes announced in the budget will mean that anyone earning

less than around £15,000 will pay more in income tax.

This is an income tax cut for the wealthy dressed up as a tax cut for the poor.

While the Chancellor has taken some of our headline policies, he has got the

fundamental point wrong; we need tax cuts for the low and middle income earners

now. Gordon Brown did not do enough for the hard working family struggling with

rising living costs, the young couple worried about interest rates rises or our

public sector workers whose income has been squeezed. I am angry that this

Chancellor has failed to show that he is listening to the people of Britain.

He has failed to cut taxes for the low paid, he has failed to create a greener

Britain by taxing pollution and he has failed to save billions of pounds by

cutting government waste. Instead he is concentrating on his own political

succession.

Although we have a reasonably strong economy with stable growth and low

unemployment, it is shameful that in Britain today the wealth gap between the

rich and poor is greater than it was under Margaret Thatcher.

In fact by introducing loopholes in the capital gains tax regime the Chancellor

has allowed the rich to minimise their tax bills. Meanwhile, the lowest earning

fifth of UK households still pay a greater proportion of their income in tax

than the highest earning fifth.

The Chancellor has ignored the issue of climate change for too long. His

proposals on Vehicle Excise Duty are only skin deep. This budget should have

been a green budget, with a vision and commitment to tackling climate change.

With the proceeds going to cut national income tax for low and middle-income

families that need it most.

Taxes have gone up significantly since 1997 and there is no case for raising

them further. We need smarter spending. Unfortunately this Chancellor has

wasted large sums of public money on unnecessary and unpopular measures.

The war in Iraq has cost us over £5 billion to date; identity cards may cost

at least £6 billion and perhaps as much as £18 billion; and we are already

committed to £74 billion for the decommissioning of the existing generation of

nuclear power stations. The government should not be wasting taxpayers' money

in this way.

Personal debt levels which have now reached a total of £1.3 trillion and a

decline in the housing market would be devastating for millions of families and

for the economy as a whole. The Chancellor has ignored this issue for too long.

This budget has failed to reduce tax for those on low and middle incomes, properly

tackle the issue of climate change using green taxation and address rising

levels of personal debt.

You can read more about my views on the budget and add your comments on my

website www.mingcampbell.org.uk

With best wishes

Sir Menzies Campbell

Liberal Democrats

www.mingcampbell.org.uk

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