Lib Dems approve income tax cuts

The Liberal Democrats have backed plans to make cuts to income tax for people on low and middling salaries.

The party's annual conference approved a policy document promising "big" reductions for struggling families at the next election.

Several MPs opposed the plan, urging leader Nick Clegg to keep spending on key public services as his priority.

The vote means the Lib Dems are the only one of the three main parties currently offering tax cuts.

It represents an important victory for Mr Clegg as he looks to put his stamp on the party after almost a year as leader.

The move, on top of an existing pledge to cut income tax by 4p, is seen by some as a bid to win over Tory voters in the run-up to the next election.

'Tighten belts'

The Lib Dems have campaigned in recent years on specific tax-raising pledges.

The leadership proposes to find the money for its change of policy through £20bn worth of savings in public spending.

After the result, Mr Clegg said: "This confirms that the Liberal Democrats are the only party with a clear plan to make Britain a fairer place."

Backing the tax-cutting motion, chief Lib Dem policy adviser Danny Alexander told the conference, in Bournemouth, it was necessary for "government to tighten its belt a little so that low-income families don't have to tighten theirs a lot".

"We will target investment where it is needed," he said.

"But once we have invested in our priorities, I would rather hand back extra money to struggling families than give it to central government. That is the choice."

Science spokesman Evan Harris tabled an amendment to the motion, insisting public services should be the main priority, rather than tax cuts, but this was easily defeated.

"Hero worship of our leaders does not help them avoid the pitfalls of being labelled a tax-cutting party," he argued.

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Supporting Mr Harris, housing spokesman Paul Holmes said the party risked becoming a "Trojan horse" for those who wanted to "slash and burn" public spending.

He said Labour's investment in services since 1997 had made a difference and the Lib Dems risked become too closely identified with Tory policies from the 1980s.

In the past, the party has campaigned for an extra 1p on the basic rate of income tax to pay for a better education system.

At the last general election it called for high earners to pay a 50p rate.

Defending the shift in strategy, Treasury spokesman Vince Cable said the promise of tax cuts was "progressive" and did not mean the party was less committed to tackling inequality.

"Struggling families are asking can you give us a bit more freedom to spend the money we have earned," he said. "Pensioners are saying can you give us a bit more freedom to spend the money we have saved."

At a fringe meeting earlier in the day, former leader Sir Menzies Campbell enthusiastically endorsed the tax plan.

Over the last two years, the Conservatives have consistently said they will not propose any "unfunded" tax cuts at the next election, while maintaining an aspiration to cut the overall burden of taxation in the future.