"CUT INCOME TAX IN BUDGET" Martin urges Brown

6.07.51pm GMT Tue 13th Mar 2007

Chancellor Gordon Brown should cut national income tax, funded by rises in green taxes, when he delivers his Budget on 21 March says town MP Martin Horwood

The Lib Dem shadow environment minister said "Gordon Brown should use next week's Budget, which will probably be his last as Chancellor, to make the tax system fairer and greener and deliver tax cuts for those on lower incomes.

People always tell me Cheltenham is an affluent, prosperous town but many people here struggle to make ends meet. Unemployment in Cheltenham is actually slightly higher than Gloucester. We have four neighbourhoods in the least well-off fifth in the country. One sixth of our children live in households officially described as 'income-deprived'.

So if we're going to raise more money from 'green' taxes, we should cut taxes for those on the lowest incomes.

This is what the Liberal Democrats are calling for. Without raising the overall amount of tax raised, the 'green tax switch' we propose would deliver lower tax bills for many households in Cheltenham as well as tackling inequality and environmental damage. Otherwise green taxes will just be seen as a tax grab.'"

Proposals put forward by the Liberal Democrats would

• Save a typical pensioner couple around £1,600 a year through proposals including scrapping council tax

• Save a typical double-earning couple around £1,500 a year through measures including a 2p cut in the basic rate of income tax

• Lift more than two million people on low income out of income tax completely across Britain by reducing the 10p tax rate to zero

• Take 1.3 million people out of the top rate of income tax by raising the threshold to £50,000 p.a.

Martin added:

"The current system of taxation is not fair. The poorest 20% of households pay a bigger share of their income in tax than the richest 20%. Wealth inequality has actually risen since Labour came to power.

These Liberal Democrat proposals will make the tax system fairer for those on low and middle incomes. This will particularly benefit pensioners, key public sector workers and young professionals."