Lib Dems abandon high tax policy

Lib Dem leader Charles Kennedy hopes to attract floating voters

The Liberal Democrats are abandoning a policy of calling for higher taxation, leader Charles Kennedy has revealed.

The party, which sought higher taxes at the last three elections, still wants wealthy people to pay more but would match this with cuts for poorer people.

Mr Kennedy told the Guardian: "It's fair tax, not higher tax."

The change is not expected to end the party's call for a 50p top rate of tax for those earning over £100,000 or green taxes on aircraft emissions.

The new approach may alarm MPs and activists on the left of the party, but the leadership believes it will bolster their credibility among moderate voters who backed them in the last general election.

We would be tearing up 100 years of Liberal lineage if we were suddenly to go in the (wrong) direction Charles Kennedy

The party is keen not to attach itself to specific tax policies years before the next election, which is expected in 2009-10.

However, the Lib Dems accept a public spending figure of around 41% to 42% of national income (GDP), which is the same as Chancellor Gordon Brown and higher than the Tories.

Mr Kennedy has been keen to stress that the new direction is not at odds with a commitment to fairness and social justice.

The Lib Dem leader said: "We would be tearing up 100 years of Liberal lineage if we were suddenly to go in the (wrong) direction."

'Three bears'

Mr Kennedy claimed that his party won the argument for higher taxes during Tony Blair's premiership.

"So it would be a bit peculiar now to turn around and say 'well, let's just have more tax and more tax and more tax'. We're not going to do that," he said.

The Lib Dem leader also compared the three main parties' recent positions on tax and spend to Goldilocks' three bears.

He argued that the Tories were too cold, the Lib Dems too hot and Labour in between.

Mr Kennedy said that he aims to reposition his party as one of "two middle-sized bears".