PRESS RELEASE

30 September 2002

Ottaway: Liberal Democrats want four new local taxes
Hard-working families across Croydon will suffer warn Conservatives

Richard Ottaway, Conservative MP for Croydon South today warned that Liberal Democrats were planning to levy four new local taxes on local businesses, drivers and local residents across South Croydon. The plans were revealed in a new Liberal Democrat policy document ratified last week by the Liberal Democrat conference in Brighton. Richard Ottaway warned:

"We already know that taxes on income have been hiked up in Gordon Brown's Budget. Now, Liberal Democrats want to go further, with four new taxes on South Croydon's local residents, drivers and local firms. It is now their party policy to introduce:

• new local income tax to replace council tax. On average, this would add 5 per cent on the basic rate of income tax.
• new workplace parking taxes which could cost Croydon firms £150 per driver per year.
• higher National Insurance contributions, imposed by regional assemblies - on top of the forthcoming increases introduced by Gordon Brown.
• new land tax to replace business rates; shops and firms in areas such as Coulsdon, where land values were more expensive, would face soaring tax bills.

"Ordinary families, local firms and pensioners on fixed incomes will be hit the hardest. No one wants these new regional taxes - set by distant politicians, over-riding the views of local communities. And there is no evidence that higher-taxing councils deliver better services - Conservative councils have lower council taxes but higher satisfaction ratings among local residents. Ultimately, throwing more money at public services without proper reform, just leads to rising costs and more wastage."

"With policies like these, it is no wonder that Liberal Democrats wanted to divert attention away at their conference - by debating the bizarre policy of allowing school children access to hard core pornography and cutting licensing fees for sex shops."

Notes to Editors

The Liberal Democrat policy paper Quality Innovation Choice was ratified by Liberal Democrat party conference on 25 September and is now their official party policy.
http://www.libdems.org.uk/documents/policies/Policy_Papers/PublicServices.pdf

• It advocates that new regional assemblies would develop 'regional transport strategies' which could involve 'the strategic co-ordination of congestion charging, workplace car park charging' (p.29). This would mean, as in London, the regional assembly could impose these new taxes irrespective of the wishes of local councils.
• 'Replacing council tax with local income tax' as well allowing new regional assemblies to levy 'a regional income tax' to fund themselves (p.23). The local income tax would replace council tax. The average earnings for a full-time employee is currently £23,088 a year. With the 2002-03 tax system, a 1 per cent increase in basic rate income tax would cost £165.53 a year. Dividing the average council tax in a local authority by this average cost of a 1 per cent increase in income tax, gives an indication of the level of local income tax required in a local authority to replace council tax. On average across England, replacing the average council tax of £804 would mean 5 per cent on the basic rate of income tax.
• Allowing regional assemblies to increase National Insurance contributions - 'NICs may easily be devolved to regional governments… English regional governments would be able to use all the money that increase raises in their region' (p.49).
• 'Replace the business rate with Site Value Rating' (p.23). This land tax would be based on land values, set as a fixed proportion of their proposed local income tax. Firms in areas where land values are higher - e.g. local high streets, would end up facing larger tax bills, sending many firms out of business, and encouraging new development on cheaper, greenfield sites.

Their Party Conference also debated a policy motion calling for 'all pornography depicting consensual sexual activity is available to adults over the age of 16' and 'reductions in the cost of licensing a sex shop'. A motion was passed for their Federal Policy Committee to examine liberalising pornography in more detail, and the motion will be introduced again for full ratification at a future conference. http://www.libdems.org.uk/index.cfm/page.agenda/section.conference/body.284.

The Evening Standard commented on last week's Liberal Democrat Party Conference: 'The party still has difficulty distinguishing between the serious and the trivial as its absurd and inconclusive debate on the minimum age for access to gay porn magazines showed. It is hard to know what the Liberal Democrats stand for, apart from garnering protest votes left carelessly behind by other parties and putting up taxes' (Evening Standard leader, 27 September 2002).

ENDS