Tom Brake unveils new alternative to Council Tax

12.00.00am GMT Tue 20th Jan 2004

Liberal Democrat MP Tom Brake today set out his Party's alternative to replace the unfair Council Tax.

A new local Income Tax, set an average of 3.75p would be levied to replace Council Tax. Based on people's real ability to pay, the move would mean tax cuts for millions of pensioners and ordinary families. Mr Brake, launching the new proposals with Liberal Democrat ODPM Shadow Edward Davey said the new Local Income Tax would leave 70% of households either better off or unaffected.

The Local Income Tax plans include:

1. A tax free personal allowance of a least 5,000 on implementation

2. No rise in the overall tax burden

3. A cap on income subject to local income tax at £100,000

4. Using the Inland Revenue to assess and collect local income tax

5. Estimated savings of over £300 million a year on bureaucracy

Tom Brake said,

"Council Tax is the most unpopular, unfair tax in Britain today. The Audit Commission has called the Council Tax system 'fundamentally flawed.' It is deeply regressive-a pensioner can pay as much as a cabinet minister."

"Local income Tax is a fair, efficient, tried and tested method of local taxation. It is already used in many other countries around the world and works very well. Most importantly it is directly related to the ability to pay. Our plan for LIT will be a huge advance for most people- 70% will pay less or be unaffected."

More information, including a list of Frequently Asked Questions, is available on the website www.axethetax.org.uk