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Last Updated: Saturday, 1 July 2006, 01:50 GMT 02:50 UK
Tax plan will test me - Campbell
Sir Menzies Campbell
Sir Menzies Campbell defended his performance in the Commons
Sir Menzies Campbell says his authority as Liberal Democrat leader is on the line over his tax proposals.

In an interview for the GMTV Sunday Programme, he admitted he could lose a vote on the plans at his party's autumn conference and it was a personal test.

Last month Sir Menzies unveiled a radical shift in the Lib Dems' approach to tax with a 2p cut in the basic rate.

The 20bn cost of the cut would be partially met by a 7bn increase in "green" taxes on cars and flights.

The other 13bn would come from the "very wealthy" via capital gains tax changes on second homes and shares.

Tony Blair attacked the plans as "completely unrealistic" and said airlines would simply avoid the new taxes by re-routing flights. Conservative shadow chancellor George Osborne was also critical of them.

'Fairer, simpler'

Sir Menzies said in a speech on 8 June that he was dropping the Lib Dems' long-standing policy of higher overall taxes, with his party instead championing "fairer, simpler and greener taxes".

Plans to raise taxes to 50p in the pound for high earners had also been ditched, he confirmed.

The party wants to introduce income tax cuts for everybody - 2p off the basic rate, and two million of the lowest paid will be lifted out of income tax altogether.

The new environmental taxes would mean hitting airlines and people who drive "gas guzzlers" - with road tax likely to rise to over 2,000 for the most polluting new cars.

Sir Menzies said: "My aim is to cut the burden of direct taxes on the low paid and Middle Britain and pay for it by raising taxes on those who pollute the environment and on the very wealthy."

But it is not yet clear what the party means by "very wealthy", nor is there a figure of just how many people would be affected by the plans, although it is understood to be "hundreds of thousands rather than millions".

In part that would involve ending capital gains tax breaks for people who have second homes or large share portfolios.

Sir Menzies said in the GMTV interview that it had been necessary to set out clearly his backing for the changes.

He also dismissed criticism of him in Prime Minister's Question Time in the Commons and said this was "theatre" and not serious politics.

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19 May 06 |  UK Politics
Tories warn against tax pledges
01 Jun 06 |  UK Politics

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