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Last Updated: Tuesday, 19 September 2006, 14:01 GMT 15:01 UK
Sir Menzies wins crunch tax vote
Sir Menzies Campbell
Sir Menzies: Faces challenge to his tax policy changes
Lib Dem leader Sir Menzies Campbell has won a crunch vote on his tax plans at the party's conference in Brighton.

The poll prevented an embarrassing defeat for Sir Menzies in the first major test of his authority as leader.

Sir Menzies said he was "pleased" after he Lib Dem leadership saw off an attempt to stop the party dropping its previous pledge for a 50p top tax rate.

Delegates also approved plans to use new taxes on "gas-guzzling" cars and aviation to pay for income tax cuts.

The tax debate comes as Charles Kennedy returns to the conference platform eight months after quitting as leader.

Mr Kennedy, who led the party to its best election result in 80 years in 2005, admitted a drink problem and quit after several frontbenchers said they would no longer serve under him.

He is expected to win a warm reception from delegates but Lib Dem officials say they are not worried Sir Menzies could be overshadowed by his predecessor.

'Moving beyond protest'

Lib Dem tax plans have dominated debate at the conference but amendments to the leadership's package were "clearly" defeated on a show of voting cards.

The Lib Dems must be clear about their policies, not like Labour and the Tories who dodge hard questions
Bruce Castle, London

Opposition to the leadership plans was led by party science spokesman Evan Harris.

He proposed an amendment which would promise a 50p tax rate on earnings over 150,000, with the money used to take another 300,000 people out of paying tax.

After winning the vote, Sir Menzies told reporters: "This was a very important day for the party because it was a day on which they had to choose between substance and symbolism and they chose substance.

"They voted with their heads along with their hearts."

Spin gibe

Lib Dem campaigns chief Ed Davey said the debate had been mature and good natured.

"This was not a party tearing itself apart," he said.

I support Ming Campbell, we all do, but this not just his party, it's yours
Evan Harris
Organiser of tax plan opposition

In the debate, Dr Harris accused the leadership of discarding a policy for the sake of the media.

"That's the symbol, that's the spin, that's the gesture," he said.

On the leadership question, Dr Harris told delegates: "I support Ming Campbell, we all do, but this not just his party, it's yours."

'Slippery slope'

Another backer of the 50p rate, Arnie Gibbons, a member of the party's tax commission, said: "We don't have that many populist policies, let's not abandon one of the best."

Outside the hall, Lib Dem MP Phil Willis told the Yorkshire Post the leadership's tax plan could start the party on "a slippery slope towards more right-wing draconian policies".

Sir Menzies wants to focus on "taxing pollution, not people".

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

'Hitting the rich'

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

There would also be a 2% cut in the basic income tax rate, a higher upper rate threshold of 50,000 and cutting corporation tax by 1%.

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

The package is meant to have no overall effect on tax revenues.

But critics question whether there will be a black hole in the sums if the green taxes do succeed in changing people's polluting behaviour - something Lib Dem officials deny.

How the Liberal Democrat tax proposals could affect you

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