Osborne's Unfunded Tax Commitments Are Utterly Feeble - Cable

1.39.00pm BST (GMT +0100) Mon 1st Oct 2007

Responding to George Osborne's speech to the Conservative party conference this afternoon, Liberal Democrat Shadow Chancellor, Vince Cable MP said: "Any expectation that the Conservatives had a radical and meaningful plan for fairer taxes has been blown out of the water with this utterly feeble set of half promises and unfunded commitments.

"We support the principle of raising the threshold of inheritance tax but where we have put forward practical proposals for reducing avoidance from very big estates, the Tories have apparently made a large open-ended commitment without explaining how it will be paid for.

"They have borrowed from the Liberal Democrats the idea of taking action on non-domicile residents in the UK but their proposal is completely inadequate and seems to be entirely voluntary.

"We agree that the burden of stamp duty should be cut, but George Osborne is missing the point. The real problem occurs for properties worth £250,000 or more that carry a 3% tax on the whole value of the house purchase. George Osborne did not suggest anything to deal with that and is unable to explain how his proposal will be financed.

"After all the huffing and puffing about green taxes, the Tories have backed away from any meaningful commitment to shifting the burden of taxation from work onto polluting activities. The so-called family fund will not offer a genuine tax cut but a means-tested benefit which will be denied to families whose parents are unmarried or to the families of widows."

Notes

The Liberal Democrats propose cutting income tax, taking the basic rate of income tax to its lowest level since 1916. The move to cut the basic rate by four pence in the pound will reduce the basic rate of income tax to 16p, benefiting millions of people on low and middle incomes.

The plans lift the tax burden on low and middle income earners whilst making the rich and people with environmentally damaging lifestyles pay a fairer share.

The revised proposals are tax neutral and have been independently evaluated by the IFS. The proposals include:

· Reaffirming the commitment to abolishing Council Tax, replacing it with a tax based on ability to pay

· Removing tax loop-holes exploited by the super-rich

· Radically simplifying the tax code, removing over 500 pages of unnecessary regulations

· Reforming stamp duty to reduce the amount of tax paid on properties worth less than £500,000

· Reforming Inheritance Tax, with the aim of raising the starting threshold to £500,000