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Last Updated: Wednesday, 21 March 2007, 15:10 GMT
Lib Dems slam Budget tax changes
Sir Menzies Campbell speaking at Prime Minister's question time on 21 March, 2007

Gordon Brown has "asked the poor to subsidise the rich" by cutting the basic rate of income tax and axing the 10p lower tax rate, the Lib Dems say.

Leader Sir Menzies Campbell said the combination of the changes meant income taxes would increase "for many".

The gulf between rich and poor is wider than under Margaret Thatcher, he said.

Sir Menzies added: "It's a wait and see Budget from a wait-for-me prime minister. He's concentrated... on his own political succession."

This budget was an opportunity to rebalance the tax system in favour of the less wealthy and the chancellor has failed to do that
Sir Menzies Campbell

On the face of it, Mr Brown's plan to cut the basic rate of income tax was a "very welcome" Liberal Democrat proposal.

"But if you look very carefully, the revenue to justify that reduction is obtained by the abolition of the 10p rate," said Sir Menzies.

"What is happening is we're increasing income tax for many tax payers in order to fund a reduction from 22p to 20p. We are asking the poor to subsidise the rich."

Sir Menzies said there was not enough in the Budget to help young first time buyers, nurses, police officers or firefighters "whose reward for service to communities sees their income squeezed".

"This Budget was an opportunity to rebalance the tax system in favour of the less wealthy and the chancellor has failed to do that," he said.

Iraq war

"This should have been a tax cutting Budget. It should have cut the tax burden on low and middle income families that need it most.

"That's the true moral case for tax cuts and it's a matter of regret that the chancellor chose not to do so."

Sir Menzies said the public were "entitled to know the effect of this Budget on their own tax bills and the state of the economy".

He also pointed out that the Iraq war had cost 5bn so far, quite "apart from the human cost which is immeasurable".

"The prime minister made the case, the chancellor signed the cheque and the Conservatives voted it through," said Sir Menzies, whose party have always vociferously opposed the Iraq war.

He also added that the government "should not be wasting tax payers money" on building a new series of nuclear power stations.

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