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Last Updated: Monday, 18 September 2006, 16:53 GMT 17:53 UK
Get serious, Lib Dems are urged
Sir Menzies Campbell
Sir Menzies: Faces challenge to his tax policy changes
Sir Menzies Campbell has urged the Lib Dems to put "substance over symbolism" as he prepares for the crunch conference vote on his tax plans.

In a questions session at the gathering in Brighton, Sir Menzies said "discipline and realism" were needed if the party was serious about government.

The Lib Dem leader faces a challenge over plans to drop the party's previous commitment to a 50p top tax rate.

He praised ex-leader Charles Kennedy, who will address delegates on Tuesday.

To applause from party activists, Sir Menzies said he had "tremendous affection" for Mr Kennedy and would welcome him back onto the front bench when he was ready.

'Moving beyond protest'

The tax proposals are the dominating theme at the conference, with the leadership's package facing opposition from some delegates on Tuesday.

Sir Menzies gave a clear signal of the argument he will use in the tax debate.

"Substance has got to prevail over symbolism," he said.

"Because if we are serious and want to move from being a party of protest and a party of opposition, as we are, towards being a party of government, then we have to show we are serious about being a government."

'Beards and sandals'

Linda Jack, a North Bedfordshire council who stood for the Lib Dems at the last general election, pointed to speculation that Sir Menzies was moving the party to the right.

She asked what future the "beard and sandals wing" of the Lib Dems had with the party.

I think we have got a chance of winning
Evan Harris
Organiser of tax plan opposition

Sir Menzies suggested Coun Jack had got the idea from "some rather superficial analysis which suggests social liberalism and economic liberalism are somehow alternatives".

The two traditions could be united, he said, insisting he was a "politician of the centre left" who wanted to make the tax system more redistributive.

Sir Menzies wants to drop the promise of a 50p tax on earnings over 100,000 and instead focus on "taxing pollution, not people".

Tax hikes for gas guzzling cars and aviation would raise 8bn to help pay for the 18.7bn in tax cuts in other areas.

'Not soft on the rich'

The Lib Dems say they would take two million people out of paying tax altogether by scrapping the 10p bottom tax rate and raising the threshold for national insurance contributions.

There are sweeteners for middle earners too, through a 2% cut in the basic income tax rate, raising the threshold for the upper tax rate to 50,000 and cutting corporation tax by 1%.

But some of the current relief on capital gains tax, corporation tax pension contributions would be scrapped.

The Lib Dems say 90% of taxpayers will benefit from the package, with only the top 10% paying more.

They are pointing to comments from Robert Chote, director of the Institute of Fiscal Studies, who said: "Dropping the 50p tax rate wouldn't mean that the party had gone soft on the rich."

But Mr Chote said those households who do not currently pay tax would not gain, and could still be hit by higher green taxes.

Lib Dem MP and science spokesman Evan Harris is leading the challenge to the plans with an amendment which would impose a 50p tax rate on those earning more than 150,000.

Mr Harris is claiming to have the support of a number of frontbench spokesman.

He told BBC Radio 4's The World At One: "I think we will build up momentum behind it. That is inevitable. I think we have got a chance of winning."

But party campaigns chief Ed Davey said he expected all members of the Lib Dem "shadow cabinet" to vote for the tax package.

And he suggested that some of the supporters of Mr Harris' amendment were not even at the conference.

How the Liberal Democrat tax proposals could affect you

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