Lib Dems call for action on the environment
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Sir Menzies Campbell, the new Liberal Democrat leader, accused Gordon Brown of “running out of steam”, producing a “tired” Budget that failed to address economic imbalances and environmental priorities.
Sir Menzies said that after 10 Budgets the chancellor had saddled the country with levels of inequality that were higher than under Margaret Thatcher and had left the pensions system “in crisis” and the economy vulnerable to £1,200bn of consumer debt.
Responding to his first Budget as Lib Dem leader, he accused the chancellor of complacency on the environment, reminding MPs that carbon dioxide emissions were now higher than in 1997. The Lib Dems pointed out that the chancellor’s increase in vehicle excise duty for the most polluting cars, such as 4x4s, to £210 a year would cost their owners the equivalent of half a tank of fuel, hardly an incentive to change behaviour.
The party also underlined Mr Brown’s decision not to change air passenger duty and his decision to put off once again an increase in fuel duty.
“Green taxes have fallen as a share of overall taxation under this government and the measures that the chancellor has announced today are little more than a token gesture,” Sir Menzies said. “We need a proper system of green economic incentives, incentives that encourage people to change the way they live – and insure that the polluter pays.”
The Lib Dems are considering proposals for higher duties on fuel and replacing air passenger duty with a tax on aircraft movements as part of a tax review.
That review is also examining proposals for simplification of the tax system. Sir Menzies attacked the chancellor for adding further complications with yesterday’s proposals.
“Why is it the Treasury tinkers with the tax system when it is so fundamentally unfair and requires radical reform? And every time he tinkers, he adds layer upon layer of complexity, an incitement to fraud.”
Sir Menzies condemned Mr Brown’s decision not to renew last year’s £200 council tax rebate for pensioners. “Why was it that they deserved help immediately before the general election but they don’t deserve it a year later?”
He warned MPs of the risks to the economy of £1,200bn of consumer debt, pointing to rising bankruptcies and house repossessions. Nearly a fifth of family incomes was being used to service debts, a return to the level when the economy “crashed” under the Conservatives, Sir Menzies said.
The flip side of a personal debt boom was the decline in private saving and the poor record of business investment, he added. Sir Menzies said “mindless regulation and excessive tax complexity are squeezing entrepreneurship out of British business and this Budget does nothing to change that”.
The Lib Dem leader also criticised Mr Brown for scuppering the “broad consensus” among the political parties in favour of Lord Turner’s proposals to overhaul the pensions system, with a bigger basic state pension paid for by a rise in the state pension age and higher taxes.
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