The Liberal Democrats have repeated their controversial commitment to scrap council tax and replace it with a local income tax. The party’s tax commission unveiled plans last week for a new system, which included a reiteration to introduce a local income tax. The commission also plans to cut the basic rate of income tax by 2p. ‘The changes in income tax will make the tax system fairer for those on low and middle incomes,’ said Lib Dem shadow chancellor, Vince Cable. ‘Specifically, this will benefit the vast majority of pensioners, key public sector workers and young professionals.’ Conservative local government secretary, Caroline Spelman, said it would cost families £700 a year more than the current system. The head of policy at the New Local Government Network, Dick Sorabji, said: ‘Under the Lib Dem proposals, there are no safeguards to ensure that levels of local income tax can be capped, meaning that in theory the tax could be set by an inequitable amount.’ Sir Michael Lyons will be publishing his report at the end of the year.
